Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

MESSAGE FROM THE QUEEN

The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:
I have received with great satisfaction the loyal and dutiful expression of your thanks for the Speech with which I opened the present Session of Parliament.

Oral Answers to Questions — ROADS

Ringwood-Ferndown Road

Captain Pilkington: asked the Minister of Transport when a second carriageway is to be built along the main road from Ringwood to the Ferndown roundabout.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Hay): It is not clear that a second carriageway on the existing alignment would be the best solution. We are at present examining an alternative proposal by the Joint Planning Advisory Committee for Hampshire, Dorset and Bournemouth for a completely new trunk road which would by-pass the existing road between Ringwood and the Ferndown roundabout. I cannot at present say when a place could be found in the road programme for either of these schemes.

Captain Pilkington: Is it possible to speed things up? This part of the road is the most congested part between London and the Poole and Bournemouth area at present. Is my hon. Friend aware that, whereas on the Dorset side of

the roundabout improvements have been made, on the Hampshire side nothing comparable has been done?

Mr. Hay: The Joint Planning Advisory Committee has only recently put the alternative to us. I understand that it has asked that my right hon. Friend should receive a deputation and hear what the proposals are. I think that we had better have an opportunity of consulting with the Committee on this new project; we have got to get it right.

Dual Carriageways (Accidents)

Captain Pilkington: asked the Minister of Transport what was the increase or decrease in accidents on roads that have been transformed from single to dual carriageways.

Mr. Hay: The increase or decrease in the number of accidents on all roads which have been converted from single to dual carriageways is not known. Investigations undertaken by the Road Research Laboratory suggest, however, that, on average, personal injury accidents decrease by about 25 per cent. following a change from single to dual carriageway.

Captain Pilkington: Is it not possible to discover these figures officially? Will my hon. Friend agree that single carriageways on main roads today are really medieval?

Mr. Hay: It is not easy to discover the information for which my hon. and gallant Friend asks because my right hon. Friend's Ministry is directly responsible only for conversion schemes on trunk roads and not those which affect classified roads. I think the statement in the second part of my hon. and gallant Friend's supplementary question is somewhat sweeping. There are a great many roads in this country which are still quite useful as single carriageway roads.

London Airport—Central London

Mr. Gresham Cooke: asked the Minister of Transport what progress has been made in improving the access from London Airport to the centre of London.

The Minister of Transport (Mr. Ernest Marples): There are now dual carriageways on just over 10 of the 13½ miles of


road from Hyde Park Corner to London Airport including the flyover at Chiswick. Work is in progress on the Hyde Park underpass, the improvement of the intersection of Earls Court Road and Cromwell Road, the Hammersmith flyover and a further mile of dual carriageway on A.4 through Cranford. The scheme establishing the line of the Chiswick Langley special road which will provide a motorway from Chiswick to the entrance to the airport was made on 14th October. Invitations to tender for the construction of the viaduct section will be issued in the near future.

Mr. Gresham Cooke: Is my right hon. Friend aware that if this road is quickly finished and opened it should be a very fine road and useful as a good exit not only for my constituents but for others on the west side of London? Also, would it not be something which we could be proud to show to foreign visitors at London Airport? Further, will my right hon. Friend say whether it is the beginning of the M.4 motorway?

Mr. Marples: Work started on the M.4 with the Maidenhead by-pass, which is nearly complete. Tenders have been invited for the foundations of the Severn Bridge, which will affect the M.4, and tenders should be invited soon for the Slough by-pass, in addition to the viaduct section I have just mentioned. I think that when it is complete it will make access to the London Airport very much more convenient for travellers to this country.

Mr. Benn: Why has the Minister answered the Question purely in terms of roads without mentioning the possibility of a rail link to London Airport, which would do more than anything else to provide speedy transit and lift the congestion which at present exists on that route?

Mr. Marples: The roads we are now contemplating will provide the first means of quick access to London Airport.

Mr. Benn: Is there no plan at all for a rail link with London Airport?

Mr. Marples: At the moment we are concentrating on the motorway—it will virtually be a motorway—which will make the journey there very speedy indeed.

Central Ring Road, Bradford

Mr. Tiley: asked the Minister of Transport when work will start on the Bradford Corporation's scheme for a central ring road in Bradford.

Mr. Marples: Work on the first stages of this scheme began last Friday, and attracts a grant contribution of £397,000.

Mr. Tiley: I thank my right hon. Friend for his help with this project which is so essential to Bradford's future development and transport problems.

Mr. Marples: I am always grateful to receive any thanks which come my way.

By-pass, Canterbury

Mr. L. Thomas: asked the Minister of Transport what are his plans for the provision of a by-pass road to relieve congestion in Canterbury.

Mr. Marples: The Canterbury County Borough Council has recently submitted a scheme to extend the inner relief road and to construct a spur linking it to the London Road—A.2—at a cost of over £500,000. This will enable through traffic and certain local traffic to avoid the city centre, and should materially relieve congestion there. The details of the scheme are now being studied and I expect to be able to issue the necessary grant within the current financial year.

Mr. Thomas: While thanking my right hon. Friend for that Answer, which will obviously bring a great deal of satisfaction, not only to the citizens of Canterbury but to hundreds of thousands of tourists to and from the Continent who are now suffering from this congestion, may I ask him whether he will have another look at the apportionment of the costs of construction and maintenance as between his Ministry and the city in view of the many additions which have been made to the plans within the last two or three months?

Mr. Marples: This is a very big problem. I will certainly look at it without extending any hope to my hon. Friend.

London-Channel Ports (Route)

Mr. Burden: asked the Minister of Transport what are his proposals for the improvement of the route from London to the Channel ports.

Mr. Marples: I am giving high priority to the improvement of A.2, which is one of the five major projects. It will have dual carriageways from Woolwich to Canterbury, including a by-pass of Dartford, the Medway Towns by-pass, further diversions east of Faversham and the lengthening of the inner ring road at Canterbury.
On the A.20, when the Maidstone by-pass is complete, the next big scheme will be a by-pass of Swanley.

Mr. Burden: Will my right hon. Friend give the length of the motorway and also say whether each carriageway possesses three traffic lanes? If not, will he endeavour to provide three traffic lanes, not only here but on every major road project which is undertaken?

Mr. Marples: In this case it is a three-lane dual carriageway. In extent it is just under 20 miles—about 17.

M.2 (Medway Bridge)

Mr. Burden: asked the Minister of Transport what steps he has taken to ensure that the construction of the Medway bridge on the M.2 takes advantage of the latest design techniques.

Mr. Marples: The design was entrusted to a firm of consulting engineers with wide experience in this country and abroad. Three alternative designs were prepared, each employing the latest techniques, and tenders were invited for each. Contractors who tendered were invited to propose variations where they considered these might be advantageous. This bridge will be the largest pre-stressed clear span in the world.

Mr. Burden: Is my right hon. Friend aware that we shall all look upon this as a very great monument to the present Minister of Transport? We shall also be very happy to know the date by which it will be finished.

Mr. Marples: It will be some considerable time before it is finished, but work has started. The main span is 500 feet and the total length is over 1,000 feet. I think that when it is finished it will attract the interest of engineers from all over the world.

By-passes, Newport and Cardiff

Mr. Box: asked the Minister of Transport whether he will now give a date for commencement of work on the by-passes at Newport and Cardiff.

Mr. Hay: Detailed preparatory work on the Newport by-pass is proceeding urgently, but I am afraid I cannot yet give a firm date for the start of construction. The Cardiff by-pass is also being prepared in detail, but it is too early to say exactly when work is likely to begin.

Mr. Box: Is my hon. Friend aware of the growing feeling in South Wales that my right hon. Friend the Minister of Transport still does not acknowledge the near operational urgency of these communications and particularly a second river crossing at Newport? Will he tell us when he expects to be in a position to give the information for which I have asked?

Mr. Hay: Certainly my right hon. Friend is very well aware of the feeling in South Wales about this, and that is one of the reasons why we are pressing on as urgently as we can with the preparatory work for these two schemes. I am afraid that I cannot without notice give any further information than I have today.

Inner Ring Road, Liverpool

Mr. Bingham: asked the Minister of Transport if he will sanction the proposal of the Liverpool Corporation for an inner ring road.

Mr. N. Pannell: asked the Minister of Transport if he is now in a position to sanction the proposal of the Liverpool City Corporation for the construction of an inner ring road for the City.

Mr. Marples: I have invited the Liverpool Corporation to submit its proposals for the first section, estimated to cost some £3¼ million, for my consideration this financial year.

Mr. Bingham: Can the Minister say when, if all goes well, this section is likely to be started and completed? Can he also say what are the best prospects he can hold out for the completion of the whole project?

Mr. Marples: It is too early to say that. All that I can say in this case is that I have asked the Liverpool Corporation for its proposals.

Mr. Pannell: Can my right hon. Friend tell us how much of the £3¼ million will qualify for grant?

Mr. Marples: Not without notice.

Motorways (Emergency Telephones and Hard Shoulders)

Mr. Janner: asked the Minister of Transport, in view of the value of emergency telephones on M.1, whether he will ensure that such telephones are provided on all motorways; and if it is intended to reconstruct all hard shoulders on M.1, M.10, and M.45.

Mr. Hay: We intend to install telephones similar to those in operation on M.1 on all major lengths of motorway. We also intend to reconstruct all the grass hard shoulders on the London—Birmingham motorway except for the two miles of the Dunchurch By-pass. The work is already half completed.

Road Safety (Pedestrians)

Mr. Janner: asked the Minister of Transport, in view of the fact that in the United States of America there are effective signs using the word "Walk", or the words "Don't Walk", to indicate when it is safe for pedestrians to cross the roads at the main traffic-light controlled intersections, whether he will arrange to have similar signs installed in such intersections in this country.

Mr. Hay: "Cross" and "Wait" signs for pedestrians are already in use in this country. But because they normally involve stopping all the traffic at the intersection while the "Cross" signal is operating, their use is restricted to those crossings where pedestrians experience special difficulties.

Mr. Janner: In view of the fact that these notices are very useful in the United States and have proved extremely effective, does not the hon. Gentleman think that he might consider installing them in many places in this country?

Mr. Hay: There is difficulty about making an easy comparison between what happens here and what happens in the United States. I understand that in

that country, as in European countries, pedestrians are obliged to obey the signals given by the lights, whereas in this country that has never been accepted as the practice. However, we are considering an experiment in London, where, perhaps, something of this kind might be done.

Mr. Benn: The whole point, which the Minister is avoiding, is that we on this side have been pressing for at least a year that some control of pedestrians will be necessary to get road safety. Will the hon. Gentleman give an assurance that this will be included in his new Road Safety Bill?

Hon. Members: Answer.

M.1 (Access to London)

Lord Balniel: asked the Minister of Transport what plans he has for improving the access into London from the southern end of M.1.

Mr. Marples: I have recently authorised the Middlesex County Council to accept a tender for the construction of the South Mimms by-pass. This scheme together with others completed, under construction, and in preparation will provide continuous dual carriageways from the eastern arm of the motorway up to the London County Council boundary. I will, with permission, Mr. Speaker, circulate a list of these schemes in the OFFICIAL REPORT.
I have also asked the local authorities concerned for its preliminary observations on my proposal to build a 4-mile length of motorway through Hendon.

Lord Balniel: While thanking my right hon. Friend for that Answer, which will be a great relief to many thousands of motorists who have to use this road, may I ask whether he can say when the work is likely to begin? Can he say, in particular, whether any improvements will be made to Apex Corner?

Mr. Marples: I cannot give the date when the work will begin. Concerning Apex Corner, however, there is no doubt that the matter is proving difficult at the moment. Therefore, I have authorised night-shift working to speed the work and in addition, with the police and the borough surveyor, we have an alternative route for northbound light traffic


and the A.A. has kindly agreed to signpost it.

Following is the list:

Schemes completed

A.6 London Colney By-pass.
A.1-A.41 Second carriageway Apex Corner to Page Street.
A.41 Second carriageway Woodville Gardens to Finchley Road.

Schemes nearing completion

A.405 Second carriageway Park Street to London Colney.
A.6 Second carriageway London Colney to South Mimms.
A.1 Second carriageway Barnet By-pass.
A.1-A.41 Enlargement of Apex Corner roundabout.
A.41 Second Carriageway Page Street to Colindeep Lane.

Scheme about to start
A.6 South Mimms By-pass.

Schemes in preparation

A.41 Second carriageway Colindeep Lane to Renters Avenue.
A.41-A.406 Brent Cross flyover.
A.1 Second carriageway Falloden Way to Aylmer Road.

London-Yorkshire Motorway

Mr. A. Roberts: asked the Minister of Transport the date when he anticipates the Yorkshire spur of the London to Yorkshire motorway will be completed.

Mr. Hay: It is too early to say when this scheme can be ready or when it can be accommodated in the programme.

Mr. Roberts: Is the hon. Gentleman aware that intelligent estimation suggests that it will be easily ten years before this road is completed? Does he not appreciate that it should be one of the five priorities mentioned by the Minister of Transport?

Mr. Hay: Unfortunately, this scheme dropped from being one of the five main projects some time ago owing to the difficulties of establishing a line, particularly through Leicestershire. The hon. Member should not, however, be too pessimistic. We hope to publish the draft scheme for the Sheffield-Leeds section early next year. If the scheme then gets a smooth passage and there are not too many objections, we should be able to speed up the whole thing considerably.

Mr. Wade: Is the Minister aware that the West Riding of Yorkshire has already waited a number of years for this road? Can he give any definite assurance that

it will be completed at least within ten years?

Mr. Hay: I always hesitate to give any dates in these matters, where so many preliminary processes still have to be gone through, but I should think it highly probable that we shall finish it within ten years.

Mr. Janner: Surely, it is about time that the Government woke up in this matter. Is it not a fact that the Leicestershire portion should have been completed years ago in accordance with the scheme submitted by the Leicestershire County Council? Does not the hon. Gentleman think that he had better get on with that job straight away, so that the other part can also be dealt with?

Mr. Hay: That part is being gat on with straight away.

Mr. Janner: Why the delay?

Mr. Hay: It is being delayed principally because of the rooted objections of many off the hon. Member's constituents and other people in Leicestershire to the line that was originally proposed.

A.30 and A.303 (Dual Carriageways)

Mr. Gresham Cooke: asked the Minister of Transport whether, with a view to freeing long convoys of traffic proceeding at a low speed to the West Country in the summer months, he will make short stretches of dual carriageway on A.30 and A.303.

Mr. Marples: I would refer my hon. Friend to the Answer I gave him on 27th October. Five of the eleven lengths built or started, and five of the proposed lengths will be dual carriageways. All these are on A.30. We have plans for improvements covering longer distances on A.303.

Mr. Gresham Cooke: Will my right hon. Friend, bear in mind that the traffic going down to Devon and Cornwall in the summer months proceeds in long convoys of about twenty-five or thirty vehicles on narrow roads which are dangerous and which lead to dangerous overtaking and that between Amesbury and Honiton, for instance, there should be at least two stretches of dual carriageway to allow the traffic to free itself?

Mr. Marples: I think that the measures I have now announced will cover that point. Frankly, the situation will not be resolved until the Basingstoke motorway is completed.

Mr. P. Browne: Will my right hon. Friend bear in mind that if he were to upgrade the Morchard Road and Torrington Road and one or two others in that area, he would relieve a great deal of congestion on the A.30 road?

Mr. Marples: If my hon. Friend has in mind any particular roads which he would like to be moved higher in the priority list, I shall be glad to have details of them.

South Wales Motorway (Maidenhead-Chippenham Section)

Sir A. Hurd: asked the Minister of Transport if he has now settled the line of the Maidenhead-Chippenham section of the proposed South Wales motorway; and when the local authorities in Berkshire will be informed.

Mr. Marples: No, Sir. The planning of this section of motorway is still at a very early stage. I have informed Berkshire County Council of my intention in accordance with my general policy to appoint consulting engineers to complete the survey as soon as possible.

Sir A. Hurd: My Question was not really about that. Is my right hon. Friend aware that a great many interests are involved and that there is a great deal of uncertainty, particularly in Berkshire and Wiltshire, about where the new motorway will go? Surely, if it is not to be constructed for another three, four or five years, it should be possible, as the other sections of the road have been established in line, to say where the line will be through Berkshire and Wiltshire and thus relieve a great deal of uncertainty.

Mr. Marples: There will be plenty of opportunity for people to object to the line and I assure my hon. Friend that there are plenty of people who are ready to object to any proposed line

Mr. Benn: The complaint against the Minister is that he has not worked out the line. In this case, it is not a matter of objection, but of delay even in laying down what the line should be. This

confirms the suspicion of the House of Commons that all the planning of the motorways is far too slow.

Mr. Marples: I am afraid that I must disagree with the hon. Member, painful though it is to me.

Inner Relief Road, Newbury

Sir A. Hurd: asked the Minister of Transport if the line of the Newbury north-south inner relief road has now been settled; and if, in view of the delay which has already occurred and the traffic congestion which is taking place in the town, he will treat the construction of this relief road as a matter of urgency.

Mr. Hay: We have decided in principle upon a scheme for an inner relief road between St. John's Road and the London Road A.4. The Berkshire County Council, as our agents, is preparing detailed plans as a matter of urgency.

Sir A. Hurd: While thanking my hon. Friend for making this a matter of urgency, may I ask whether he can say whether construction of this inner relief road in Newbury, which is so urgently needed, will start next year? I ask this because there have been suggestions that it will be another three years before anything gets going. Will construction start next year?

Mr. Hay: I cannot say definitely whether it will start next year. We will fit the scheme into the programme as quickly as we can. Again, however, my hon. Friend should not be too pessimistic.

By-pass, High Wycombe

Mr. John Hall: asked the Minister of Transport if work will be started on the A.40 High Wycombe by-pass in 1961.

Mr. Hay: We will publish as soon as possible a draft scheme to establish the line of the by-pass. This and other statutory procedures together with the detailed engineering design and the acquisition of land must necessarily take some considerable time, and I cannot yet forecast how soon it will be possible to start construction.

Mr. Hall: Is my hon. Friend aware that that Answer gives me no satisfaction whatever? Is he further aware that the road through the High Wycombe valley


is today much more dangerous and difficult than it was in the days when the Steward of the Chiltern Hundreds was appointed to safeguard travellers? Will my hon. Friend for heaven's sake, do something about it?

Mr. Hay: As I have said to my hon. Friend on a number of occasions before, I use this road very much myself and I am anxious to see an improvement completed as quickly as possible. I am afraid, however, that we cannot please everybody as quickly as we would like all over the country at the same time.

Watford Way

Mr. Goodhew: asked the Minister of Transport when he expects work on the widening of Watford Way to be completed; and whether this work has so far been carried out in accordance with the time schedule laid down.

Mr. Marples: I hope that the surfacing of the carriageways between Page Street and Selbourne Gardens will be completed by January and the pedestrian subways by February next year. The work is running a few months late because of bad weather and difficulty in getting entry on land required for the subways.

Mr. Goodhew: Is my right hon. Friend aware that this rather long drawn out affair has caused great inconvenience and frustration to motorists who have to use this road, and that last week, after this Question was tabled, it was very difficult for motorists ever to find more than six men working on it a whole day?

Mr. Marples: I really do not think that that is true, because the motorists are on the surface and the men are working underground.

Great Cambridge Road, Enfield (Flyover)

Mr. Mackie: asked the Minister of Transport what decision he has come to regarding vehicular under- or overpasses on the new section of the Great Cambridge Road where it passes through the north end of the Borough of Enfield.

Mr. Hay: We have decided to advertise a draft Order providing for the construction of a flyover at Turkey Street as part of the scheme to improve this section of the Great Cambridge Road.

We cannot make a final decision until we have received and considered any objections that may be made.

Mr. Mackie: Yes, and I thank the hon. Gentleman for that reply, of which I received details this morning. I should like to ask him whether he is aware that the people of Enfield will be very gratified at this, although they received only half the loaf they asked for. Is he aware that in the detailed reply there is a suggestion that there may be some delay in getting the flyover at the same time as the road? Could he see that both come together?

Mr. Hay: I think that the hon. Gentleman's supplementary question shows that we do please some people sometimes. We shall certainly do what we can to speed this road up as well.

Apex Corner, Middlesex

Mr. Goodhew: asked the Minister of Transport what is the estimated traffic which will use the roundabout at Apex Corner, Middlesex, when the Hendon urban motorway is constructed.

Mr. Hay: Our provisional estimate is that when the Hendon urban motorway is constructed some 4,000 vehicles per hour at the evening peak will continue to use Apex Corner.

M.1 Motorway and Dartford-Purfleet Tunnel (Tolls)

Mr. Dodds: asked the Minister of Transport if he will state the cost of the M.1 motorway and the estimated cost of the Dartford-Purfleet Tunnel; and how long it is estimated it will take to repay the money which has been advanced towards the cost of the tunnel, so that the tunnel will be free from the need to charge tolls.

Mr. Marples: The M.1 motorway cost about £21·5 million. The estimated cost of the Dartford-Purfleet Tunnel is a little over £11 million.
It is estimated that it will take about twenty years to repay the money advanced towards the cost of the tunnel.

Mr. Dodds: Will the right hon. Gentleman explain for the benefit of the people in south-west Kent why it is that they have got to pay tolls to use a motor road under the Thames and yet


the M.1 road is free? Will he also explain to the House why his Department is considering charging tolls on motorways in the future? Will he let people know about the old-fashioned mentality in his Department which wants to go back to the Victorian era?

Mr. Marples: The reason tolls are being charged is because Parliament passed the Dartford Tunnel Act, 1957.

Mr. Dodds: Will the Minister explain that there is a study going on about charging tolls on motor roads in future?

Mr. Marples: To my mind, it is by no means settled what we shall do, but so far as tunnels and bridges are concerned, I think tolls are desirable.

Hon. Members: Why?

Mr. Dodds: asked the Minister of Transport, in view of the dissatisfaction arising from the decision to charge tolls for the use of the Dartford-Purfleet tunnel, and the fact that tolls are not to be charged for the new Blackwall tunnel and for the M.1 motorway, if he will state Her Majesty's Government's policy with regard to the imposition of tolls, in view of the confusion in this matter.

Mr. Marples: It remains our policy to charge tolls on certain very costly new bridge and tunnel projects where the present inconvenience to road users will be heavily outweighed by the value of the new facilities. As I said in reply to the hon. Member on 20th July, the new Blackwall tunnel is an exceptional case. For motorways it has been decided that the first part of the network will be toll free. No decision has been taken about later motorways and the question is being further studied.

Mr. Dodds: But how can the right hon. Gentleman deny that there is confusion when we know that the question is being studied whether there will be tolls on the new motorways? There will be none on the M.1 motorway, and because there was an old Blackwall Tunnel the new one, which costs money, will not be charged with tolls. This is a wholly cock-eyed way to run the country's roads and motorways. Anyway, does not the motorist pay enough already without having to pay tolls?

Mr. Marples: I can see that the hon. Gentleman is agitated about this, but

the Dartford-Purfleet Tunnel is an entirely new tunnel and the Blackwall Tunnel is not entirely new, and that is the difference.

Mr. Gresham Cooke: Is there not a clear difference of principle between these cases? Does not this bridge and tunnel save the motorist from a long journey round? Therefore, there is understanding of a toll in that case—[HON. MEMBERS: "Why?"]—whereas the motorway—[HON. MEMBERS: "Ask a Question."]—is parallel to the old road, and, therefore, there is no justification for a toll on the motorway.

Mr. Sydney Irving: In view of the concern felt by a number of local authorities in the area of the Dartford-Purfleet Tunnel, will the right hon. Gentleman receive a deputation?

Mr. Marples: No, I am afraid not now, because a decision has been taken.

Hon. Members: Oh.

Mr. McAdden: While expressing some sympathy with the Question and the point of view of the hon. Member for Erith and Crayford (Mr. Dodds), may I ask my right hon. Friend whether he will bear in mind that the people living in south-east Essex are anxious that the people of Kent should also come to Essex? Will my right hon. Friend realise that tolls, provided that they are reasonable, will be infinitely preferable to the exorbitant rates charged by the British Transport Commission for use of the ferry to Gravesend?

Mr. Marples: I think that it would be wise for me to keep out of this local controversy.

Mr. Mellish: Will the right hon. Gentleman look at the question of receiving a deputation again? Does he not agree that it is usual for a Minister to receive a deputation from local authorities especially when he is asked to do so by an hon. Member? I should have thought that the Minister would at least have received the deputation and listened to what it had to say.

Mr. Marples: The difficulty is that the Act has been passed by the House and there is nothing I can do to change that.

Mr. Dodds: In view of the unsatisfactory nature of the reply, I beg to give


notice that I shall raise this matter again on the Adjournment at the earliest opportunity.

Underground Garage, Hyde Park (Cost)

Mr. Lipton: asked the Minister of Transport the estimated cost of constructing the proposed underground garage in Hyde Park.

Mr. Marples: I understand that the construction cost, for a garage for 1,000 cars, may be something less than £1 million.

Mr. Lipton: Is the right hon. Gentleman aware that that adds up to a capital expenditure of £1,000 per car? [An HON. MEMBER: "Jolly good."] Does the right hon. Gentleman seriously think that on that basis this garage can be made a commercial proposition, especially in view of the unhappy experience of the London Wall garage which is only 50 per cent. occupied?

Mr. Marples: Yes, Sir, I think that it would be possible to charge prices similar to those prevailing in the rest of the West End.

By-pass, Chandler's Ford

Mr. D. Price: asked the Minister of Transport when he will authorise the commencement of work on the proposed Chandler's Ford by-pass, in the Borough of Eastleigh, Hampshire.

Mr. Hay: We hope to authorise work to start when the statutory procedure concerning side roads has been carried out and the necessary land is acquired.

Mr. Price: Is my hon. Friend aware that on 7th November, 1957, his right hon. Friend's Department indicated to Hampshire County Council that this by-pass would be completed by 1st October, 1961? Can my hon. Friend assure the House that this completion date will be honoured?

Mr. Hay: No, Sir, I am afraid that I cannot. The trouble is that we have had a lot of difficulty with one of the junctions at the northern end of the by-pass because there is there a parish council memorial playing field in relation to which a number of objections

have been raised against what we had in mind to do, but I think that we shall be able to complete all procedures in time for the scheme to be authorised in 1962–63.

Redbridge Junction, Eling, (Fly-over)

Mr. D. Price: asked the Minister of Transport when he will authorise the construction of a fly-over at the Redbridge junction of A.35 and A.36, in the parish of Eling, Hampshire.

Mr. Marples: I have invited the Hampshire County Council to prepare detailed plans of a scheme. Until this is done and I can determine whether statutory orders are necessary, I cannot say when the scheme will be authorised.

Mr. Price: Am I or am I not to take it that my right hon. Friend's reply is encouraging? This is fine Ministry language, but is my right hon. Friend aware that I have raised this matter twice a year during the past five years and that my constituents continue to be murdered on this junction? Is he aware that in Hampshire we feel very strongly that this must have priority? It is a modest scheme. May I have some assurance that something will really be done about this crossing?

Mr. Marples: The matter at the moment rests with the County Council which was asked at the end of September to prepare a scheme.

Dr. King: Is the right hon. Gentleman aware that this problem is the most serious of a number of great problems in Hampshire and that this is one of the worst and most dangerous bottlenecks in the country in the summer? Can he tell us whether his Department has solved all the technical problems involved. Has not part of the cause of the delay been the Department's uncertainty about what form the fly-over should take?

Mr. Marples: No, Sir. Hampshire County Council itself wished to prepare this scheme. It has a county surveyor and it wanted to prepare it. It has now been asked to prepare it and until the county council submits a scheme the matter does not rest with my Ministry.

Road Works (Traffic Signs)

Mr. E. Johnson: asked the Minister of Transport if he will require "Road Work Ahead" and similar signs to be removed as soon as the work in question is completed; and if he will require such signs to be covered up on Sundays and other days when work is not actually in progress provided they do not obstruct the road.

Mr. Hay: Removal of these signs upon completion of road works is required by Direction 19 of the Traffic Signs Regulations and General Directions, 1957. Further guidance is given to highway authorities and statutory undertakers in the Traffic Safety Code for Road Works, 1958, which advocates that the signs should be covered up when no work is in progress and there is no obstruction to the highway.

Mr. Johnson: Is my hon. Friend aware that that guidance is not widely accepted? Will he take rather more strenuous steps to see that it is carried out?

Mr. Hay: The guidance is very well known to highway authorities and to county councils in particular. The difficulty is that it appears that many contractors are not as fully aware of it as are the highway authorities. I will see whether there is anything more that we can do to bring the matter to their notice.

Mr. E. Johnson: asked the Minister of Transport if he will give instructions that a road sign showing "All Clear" should be erected at the end of an area covered by a "Road Work" sign, as is done on German roads and occasionally on M.1.

Mr. Hay: We are at present considering the possibility of using such signs generally, as well as on M.1, but there may be disadvantages in using them on some all-purpose roads.

Mr. Johnson: Is the Minister aware that they are not always used even on the M.1 and that it would be admirable if they could be used on all such roads?

Mr. Hay: I am aware of that.

A.1 Road, Welwyn-Hatfield

Lord Balniel: asked the Minister of Transport whether he is yet in a position to announce his decision on the

alternative schemes submitted to him by the Hertfordshire County Council for improving the A.1 road between Welwyn and Hatfield.

Mr. Marples: My engineers have studied the schemes submitted and are discussing the problem further with the staff of the county council. I will reach a decision as quickly as possible.

Lord Balniel: Is my hon. Friend aware that the county council sent forward these schemes in May of this year? In view of the very considerable confusion, which now exists about the future of this road, can he say what "as quickly as possible" means? Does it mean this week, next week or next year?

Mr. Marples: Very shortly.

Hull, West Riding and Midlands

Mr. Coulson: asked the Minister of Transport what plans he has for the improvement of road communications between the port of Hull and the West Riding and Midlands.

Mr. Marples: A number of schemes are being carried out or are in an advanced state of preparation to improve sections of the Leeds to Hull route on A.63 between Leeds and the Great North Road and between Howden and Hull. As regards the routes to Sheffield and the Midlands, a census of traffic crossing Boothferry Bridge has recently been taken and the needs of the area will be reviewed in the light of the results.

Mr. Coulson: While thanking the Minister for that reply, may I ask whether he will give urgent consideration to the eventual extension of the Yorkshire motorway to link with the port of Hull? In the meantime, has he had time to study the report of his advisers as to the use of the part of the Hull-Barnsley railway line, which is now disused, in improving existing road communications?

Mr. Marples: I will look at that.

Mr. Jeger: Will the Minister give urgent attention to this question, as there is increasing difficulty at Boothferry Bridge owing to the nature of its construction and the congestion of traffic which occurs there, and this is of great


inconvenience to the port of Goole, which is a neighbour of the port of Hull?

Mr. Marples: I will certainly look at that.

A.30-A.33 Junction (Flyover)

Mr. Freeth: asked the Minister of Transport when he hopes to begin work on the flyover at the junction of A.30 and A.33.

Mr. Hay: I am afraid we have not yet been able to fit this scheme into our programme.

Mr. Freeth: Does not my hon. Friend recall that last Session he gave a hopeful answer about the construction of this flyover? In view of the delays which have taken place on this dangerous road junction, would it not be a good idea to ask the county council to prepare plans so that when it can be fitted in, it will be all ready to go into construction?

Mr. Hay: Yes, Sir. We are getting on with this. We have now reached general agreement with Hampshire County Council on the form which the flyover should take. The council will be asked to start the necessary survey work so that the necessary detailed procedures can be put in hand. Until the survey is completed I cannot forecast the starting date.

Oral Answers to Questions — SHIPPING

Merchant Ships (Discharge of Effluent)

Mr. P. Browne: asked the Minister of Transport if he is aware that merchant ships are discharging effluent, other than oil residue, in enclosed waters to the detriment of local interests; and if he will take steps to prevent this happening in the future.

Mr. Marples: I am not aware of any general complaints about this matter. Prevention of the discharge of poisonous, noxious or polluting matter is covered by existing legislation.

Mr. Browne: May I refer the Minister to some correspondence which I had with him about a ship which was either pumping its bilges or flushing out its coal bunkers in the Taw and Torridge estuary outside Appledore? Has not he the

power to prevent this sort of thing happening until the ships get on the high seas? He says that he has, yet these ships continually do this, and it is harmful to local interests.

Mr. Marples: If any particular case is brought to my attention, I will look at it. In this case we made an investigation and we decided that it was not detrimental. If my hon. Friend has any other case in mind, I should be delighted to have details of it.

Mr. Awbery: As this is a very important problem for the towns situated along the coast, can the Minister say whether any action has been taken recently against captains who have been guilty of discharging effluent or oil in coastal waters?

Mr. Marples: Perhaps the hon. Gentleman will put a Question down about that.

Mr. Scott-Hopkins: Will my right hon. Friend also bear in mind the fact that a great deal of oil is still coming back on to our beaches, that ships discharge oil outside territorial waters, and that it is still his responsibility to try to prevent this if he can?

Mr. Marples: It is extremely difficult to prevent that sort of thing, but if any hon. Gentleman has a case in mind I should like details because it would help me generally.

Merchant Shipping Act, 1894

Mr. Frank Allaun: asked the Minister of Transport what proposals he has to amend the Merchant Shipping Act, 1894; and when he intends to introduce the necessary legislation.

Mr. Marples: I would refer the hon. Member to the reply which I gave on 26th October to a similar Question by the hon. Member for Bristol, Central (Mr. Awbery).

Mr. Allaun: Is the Minister aware that it is eleven years since the union first sought an amendment to the Act and that what is particularly incensing the seamen in Salford and other ports is that they are denied the basic freedom long since won by other workers and are treated as criminals if they go on strike even when in dock?

Mr. Marples: The National Maritime Board on which both sides of the industry, including the seamen, are represented, is considering this matter, and it assures me that there will be no delay in presenting its conclusions to me. I think that it is very much better that both sides of industry should settle this so that legislation would be acceptable all round. I must say that a seaman can withdraw his labour at the end of his engagement, or if it is in the terms of his articles.

Mrs. Braddock: Will the Minister bear in mind that for the past two years very keen negotiations and discussions have been going on by the National Union of Seamen about this matter, and does he think it would be wise, in view of the unsatisfactory state of the industry, to make an interim report about suggestions which are being made in order that there can be further discussions before legislation takes place?

Mr. Marples: I would confirm that a great deal of consultation has been going on, and I am hopeful that the National Maritime Board will present its conclusions quickly. The quicker the better. I can assure the House that I shall not waste any time in considering them.

Mr. Awbery: Is the Minister aware that the Merchant Shipping Act, 1894, is quite inadequate to deal with the problems of 1960, and will he make urgent representations to the Board to report on this matter so that something can be done? Does he know that quite recently a dispute took place in the mercantile marine because of the difficulties of this Act. Therefore, will he remove the difficulties so that the men can work more in harmony with the employers than they can do at the moment?

Mr. Marples: I hope that the National Maritime Board will see the Questions and Answers today.

Oral Answers to Questions — RAILWAYS

Superannuitants (Pensions)

Mr. Watts: asked the Minister of Transport whether he will give a general direction to the British Transport Commission to increase all superannuation

pensions to railway employees, so as to bring up the value of the pre-war pensions to counteract later inflation.

Mr. Marples: No, Sir.

Mr. Watts: Does my right hon. Friend think that that Answer is fair in view of the great extravagance that takes place on luncheons all over the place by the Transport Commission? Will he do nothing about pensions and yet allow these great extravagances all over the country?

Mr. Marples: I do not think that the two matters are related.

Mr. Popplewell: Will the right hon. Gentleman have another look at this matter? Is he not aware that railway superannuitants are existing on the old pre-war scale and that there is very deep feeling among them about it? Will the right hon. Gentleman press his right hon. and learned Friend the Chancellor of the Exchequer to agree to some form of subsidy in the way suggested in the Guillebaud Report so that justice might be done to these individuals?

Mr. Marples: It is not accurate to say that nothing has been done since before the war. There were three supplements, although they were quite modest, given by the B.T.C. in 1953, 1955 and 1956.

Mr. Benn: As the right hon. Gentleman has, to the best of my knowledge, referred this matter to the Stedeford Committee, will he give us an assurance that when he produces his White Paper there will be a reference in it to this matter so that the House may know what view the Government take of this very serious problem for superannuitants?

Mr. Marples: I do not think that any undertaking was given. My right hon. Friend the Member for Tynemouth (Dame Irene Ward) wrote a letter which was sent on to the Stedeford Committee.

Mr. Stodart: Is it not true that the cost of providing for this would be about £1 million? In view of the enormously increased amount in wages awarded by the Guillebaud Committee, is not there room for a sense of balance between the Ministry and the Treasury?

Mr. Marples: The actual cost would depend upon the supplement granted, and therefore it might vary considerably.

Coal Wagons

Mr. A. Roberts: asked the Minister of Transport if he will give a general direction to the British Transport Commission to take all possible steps to avoid shortages of coal in the country by providing an adequate supply of wagons for moving coal from the collieries.

Mr. Marples: No, Sir. But I am in close contact with the British Transport Commission, which assure me that it in conjunction with the National Coal Board is taking all practical measures to secure the free movement of industrial and domestic coal during the coming winter.

Mr. Roberts: Does the Minister realise that unless the matter is put in hand immediately there is likely to be a shortage of coal into the Home Counties and into London? Will he also bear in mind that the crisis last year caused some unemployment and shortage of fuel throughout the United Kingdom?

Mr. Marples: I was in touch with Sir Brian Robertson, the chairman of the Commission, as long ago as the summer, and I am prepared to see him again, but I can assure the hon. Gentleman that it is not so much a shortage of wagons as a shortage of staff in crucial areas such as London, Birmingham, and Salford. I am prepared to see Sir Brian Robertson again to see if anything can be done.

Mr. Popplewell: Does not the Minister realise that his proposal to cut the Commission's investment programme again this year is a contributory factor to many of the difficulties with which the Commission is faced in moving coal and other goods?

Mr. Marples: The difficulties with which the Commission is faced are caused by a shortage of staff, and the amount spent on investment does not affect that.

Mr. Callaghan: Can the Minister give me an assurance that in South Wales there will be no shortage of wagons this year, in view of the fact that last winter we lived under the almost permanent threat of a shortage any time there was an excessive cold snap?

Mr. Marples: I will take that up with Sir Brian Robertson, the chairman, because primarily it is his responsibility as a day-to-day matter.

Trade Unions (Consultation)

Mr. Boyden: asked the Minister of Transport if he will now add at least one representative of the railway trade unions to the Stedeford Committee and the recently-appointed committee on railway matters.

Mr. Marples: No, Sir. The Special Advisory Group under the chairmanship of Sir Ivan Stedeford completed its work at the beginning of last month and has now been disbanded. The Study Group under my chairmanship on railway modernisation, as was explained in the debate on 26th October, is not a formal committee with fixed membership.
As I stated during the debate, I shall be glad to consider any views which the railway trade unions may care to put forward on railway modernisation, or other matters affecting the size and shape of the industry.

Mr. Boyden: Does not the Minister think that the advice of the Stedeford Committee would have carried more weight and would have been better advice if there had been a railway trade unionist on it? Is he not anxious to avoid the same sort of mistake with the committee which he has recently set up?

Mr. Marples: The trade unions can give any advice they like, and it will certainly be taken into account.

Mr. Popplewell: What does the Minister mean when he says that the trade unions can give evidence? This committee has been set up under his chairmanship. Is it his idea that he would invite trade unions to attend a meeting and then, by question and answer, expect them to give useful evidence? Or will the Minister invite the trade unions to submit a reasoned case as to what they think the future of the railways should be?

Mr. Marples: We should all get it clear that it is not a committee. It is normal consultation between the British Transport Commission, various members of my


Ministry and different Government Departments. I did not call it a committee; hon. Members opposite did.

Mr. Benn: As the Stedeford Group were reporting jointly to the Minister of Transport and the British Transport Commission, will the Minister give an assurance that when he publishes the White Paper it will include the comments of the British Transport Commission on the Stedeford Group's report, as well as the comments of the Government upon it?

Mr. Marples: We had better wait until the White Paper is published.

Modernisation Programme

Mr. Boyden: asked the Minister of Transport what consultations he had with the President of the Board of Trade when he cut the British Transport Commission's modernisation programme, with regard to the effect of these cuts on the employment situation in development districts.

Mr. Marples: I am awaiting the British Transport Commission's detailed proposals for the expenditure of the £175 million provisionally allocated to the Commission for investment in 1961. When this information is available, I shall be in a position to consider, with my right hon. Friend the President of the Board of Trade, what the effect might be in development districts.

Mr. Boyden: Is not this another case of making haphazard and extempore cuts which have all sorts of unexpected effects on the economy? How can the Minister expect my constituents to have much confidence in him when this sort of thing happens without adequate long-term planning?

Mr. Marples: If any of the hon. Member's constituents are adversely affected, no doubt he will let me know, but I do not think that this proposal will adversely affect them.

Mr. Benn: In view of the general transport crisis which we have in this country at the moment, how can the right hon. Gentleman justify a cut in the net investment in transport, as a result of which £25 million is taken off railway investment and a mere £12 million is added to road investment,

which means that we shall be spending less next year on all our forms of transport investment than we have spent this year, despite the growing congestion?

Mr. Marples: The Select Committee on the Railways criticised some of the financial aspects of the modernisation programme, and steps are being taken to reassess the prospects, because it is not modernisation regardless of expense which is wanted but efficient modernisation.

Euston-Glasgow Main Line (Electrification)

Mr. K. Robinson: asked the Minister of Transport what effect his recent decisions will have upon the electrification of the London Midland main line from Euston to Glasgow; and when he now expects the Euston-Crewe section to be completed.

Mr. Marples: As I stated in the House on 26th October, the British Transport Commission has prepared a reassessment of the London Midland electrification scheme. This is being examined by my Ministry, in consultation with the Commission, as a matter of urgency.

Mr. Robinson: Does the Minister mean by "reassessment" a slowing up, which seems to be implied by his cut in the capital investment programme? Is he aware that the air pollution over a large area of my constituency will be intolerable until this electrification is completed? If it is a good idea to do this, surely it is a better idea to do it as rapidly as possible?

Mr. Marples: It is difficult to discuss the London Midland electrification scheme by Question and Answer. I can assure the hon. Member that it is a very complicated subject.

Mr. Benn: Does not the right hon. Gentleman recollect that the Select Committee recommended the completion of the London Midland electrification as rapidly as possible, because the longer the transitional period goes on, the longer there will be two types of traction and the greater the loss on that line?

Mr. Marples: I will bear that in mind, and I will also bear in mind the British Transport Commission's own reassessment of the problem.

Oral Answers to Questions — TRANSPORT

Traffic Problems, London (Committees)

Mr. Lipton: asked the Minister of Transport how many committees are now sitting to consider traffic problems in London.

Mr. Marples: There are three committees dealing with traffic problems in the London area; they are the London and Home Counties Traffic Advisory Committee, the Transport Users' Consultative Committee for London and the London Travel Committee.

Mr. Lipton: Apart from adding to the confusion and providing the Minister with excuses for inaction, what on earth are those committees doing? Are they really necessary? Has not the time come for one single streamlined traffic committee which will tackle London's traffic congestion in a really comprehensive way and not in the scrappy way now going on?

Mr. Marples: The hon. Gentleman last asked his Question eighteen months ago. There were three committees then and there has been no addition since. I was hoping that he would be pleased instead of indignant.

Mr. Mellish: We recently gave the Minister powers in the Road Traffic and Roads Improvement Act to streamline this. It was what he asked for. Will he tell us what he has done about it?

Mr. Marples: We have set up another traffic management unit, which is executive and not advisory.

Mr. Lipton: In view of the very unsatisfactory nature of the reply, I shall raise the matter again.

Goods Vehicles (Carriers' Licences)

Mrs. Slater: asked the Minister of Transport (1) what steps are taken to ensure that haulage vehicles are correctly licensed for the work which they do;
(2) if he will consider how best haulage vehicles should prominently display their licence numbers for the type of work for which they are licensed.

Mr. Hay: A goods vehicle used under a carrier's licence must have on its wind-screen

an official disc showing clearly the type of licence and any major conditions attached thereto.
Our staff keeps a check on vehicles on the road to see that the work they are doing is within their licence.

Mrs. Slater: Does the hon. Gentleman realise how widespread is the growing practice of hauliers of taking out a C-licence and doing A-licence work when the C-licence costs two-thirds less than the A-licence? Is he aware that, in the first place, these people are dodging taxation and, in the second place, are able to undercut the honest man in the prices that they charge for their work? Is he aware that it is terribly difficult for a policeman or anyone else to check these people if one has to wait until the vehicle stops before one can see the licence? [HON. MEMBERS: "Speech."] Would it not be better to have a requirement that some much bigger sign, marked A, B or C, should be placed on the vehicle so that anyone at a glance could see whether or not these men were avoiding taxation and the proper responsibilities that they have in case of accidents? [HON. MEMBERS: "Speech."] This is important to hon. Members opposite who might suffer damage. Is the right hon. Gentleman aware that, though these people may be covered by insurance against, personal injury, the insurance companies will not cover damage to property if these vehicles are not operating under the appropriate licence?

Mr. Hay: The hon. Lady has raised a number of points and I hope that she will forgive me if I do not reply to them all. [HON. MEMBERS: "Why?"] Because it would take a great deal of time to answer fully. There is, of course, always a certain risk of abuse of any licensing system. We have over 100 staff engaged on the enforcement of this law and last year there were no fewer than 3,800 prosecutions for this type of thing. We keep a very close watch on it.

Mr. Mellish: Surely the figures prove that there is a great deal of abuse going on. Is it not a fact that the trade unions are very much concerned about this matter? Will the hon. Gentleman look seriously at the many points made by my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) which are very relevant?

Mr. Hay: The fact that I said that I would not try to answer all the points that the hon. Lady made did not mean that I shall not look at all that she said.

Mobile Shops (Accidents to Children)

Mr. Randall: asked the Minister of Transport what action he is contemplating to deal with the prevention of accidents to children arising from the use of mobile shops.

Mr. Marples: There is no simple or satisfactory solution of the problem to which the hon. Member refers, but I will review the position with the manufacturers and operators of these vehicles and others of a similar type in order to see whether any further safeguards can be devised.

Mr. Randall: I am much obliged to the right hon. Gentleman, but is it not a fact that the Road Research Laboratory, in February, 1959, submitted a suggestion that guard rails should be provided between the wheels? I understand that the suggestion has been submitted to the Minister. This was a very long time ago. Is the Minister not now in a position to tell us whether or not he is prepared to accept the suggestion?

Mr. Marples: As to that suggestion it has not been found possible to overcome some of the objections to guard rails, but I assure the hon. Member that I share his concern about this matter. I think that other experiments are now taking place with a view to enabling the driver to see what is happening underneath the vehicle so that he will not move off if children are playing there.

Mr. Benn: Is the right hon. Gentleman aware that if he had the rower to authorise the construction of different types of vehicles he would be able to guarantee that nothing would be put on the road which was likely to endanger children? Is he also aware that if sales were possible only on the pavement side it would reduce the risk to children who might otherwise be in the middle of the road and who might be hit by a passing vehicle?

Mr. Marples: I do not think that this overcomes the technical difficulty of seeing how one can keep children from getting into mischief round these vehicles. That means is not easy to devise.

Driving Tests (Trunk Roads)

Mr. Dempsey: asked the Minister of Transport if, in view of the number of accidents occurring on trunk roads, he will include in driving tests driving on trunk roads as well as built-up areas.

Mr. Marples: Driving test routes include a section of road free from speed limits wherever possible, but the choice of route entails striking a balance between conflicting needs and we cannot therefore always include a length of unrestricted road.

Mr. Dempsey: Is the Minister aware that there has been a growing number of accidents, for example through overtaking, on our trunk roads, some of them, incidentally, affecting persons only recently granted driving licences? Will he direct the testing authorities' attention to the fact that driving tests can be undertaken on these trunk roads?

Mr. Marples: I think that generally speaking, over the country as a whole, the driving tests take place both in urban areas and on unrestricted trunk roads, but there are cases in which this is rather difficult, and if the hon. Member has any of these in mind where driving tests are carried out which are not satisfactory, I shall be glad if he will let me know.

Fatal Acidents (Drunken Drivers)

Mr. Dempsey: asked the Minister of Transport if he will introduce legislation which will ban for life any driver who, while under the influence of drink, has caused a fatal accident.

Mr. Marples: As announced in the Gracious Speech, the Government are now preparing a Bill to promote greater safety on the roads, and in this connection are reviewing the present statutory provisions on driving offences and penalties.

Mr. Dempsey: Is the Minister aware that it would be most encouraging, in the light of this review, if some steps were taken to ensure that offences of this type were very firmly dealt with? Has the Minister's attention been drawn to the fact recently that the number of fatal accidents concerning drunken


drivers is increasing? Will he use his influence to ensure that there will be stiffer penalties, in the light of this report?

Mr. Marples: I am sure that the whole House is concerned about the number of fatalities on the roads. I assure the hon. Member that I will bear what he said in mind when we formulate our proposals.

Three-Wheeled Motor Vehicles (Classification)

Vice-Admiral Hughes Hallett: asked the Minister of Transport what are his intentions with regard to classifying those three-wheeled motor vehicles which, being at present defined as motor cycles, are affected by the provisions of Section 2 of the Road Traffic (Driving of Motor Cycles and Mopeds) Act, 1960; and if he will make a statement.

Mr. Hay: This Act will prevent certain three-wheeled motor vehicles, having an engine with a cylinder capacity exceeding 250 c.cs., from being driven by the holder of a provisional licence after June, 1961. My right hon. Friend does not consider that the interests of road safety require this restriction on the driving of such three-wheeled vehicles other than motor cycles with side-cars, and he will bear in mind the need for amending the Statute on this point.

Vice-Admiral Hughes Hallett: Does my hon. Friend recollect that the Bill, in its original form, as first debated by the House, included a Clause which made such a provision for this matter, but it was removed at the Government's request on the understanding that any reclassification could be done by Order? If that is not so, will he bear it in mind in any future legislation that the sponsors of my Bill were opposed to discriminating in any way between the motorcycle combination, on the one hand, and other kinds of three-wheeled cars, and will continue to oppose such discrimination?

Mr. Hay: My recollection of what happened on the Bill is a little at variance with that of my hon. and gallant Friend, but we have in mind legislation on this matter, and I think that it would be appropriate to defer any consideration of what types of vehicle should be included until that time.

QUESTIONS TO MINISTERS

Mr. F. Noel-Baker: On a point of order. Many of my hon. Friends have found themselves in a difficulty, particularly now that transport is becoming a controversial matter. There were 63 Questions to the Minister of Transport today, and only 48 were reached. The Minister next comes to the top of the list some time after Christmas. He will be within reach of Oral Questions towards the end of December. This is a very unsatisfactory situation when there will certainly be a large volume of Questions to which we feel that Oral Answers should be available to hon. Members. Could the present order of the Questions on the Order Paper be considered to see whether we can have a greater opportunity of putting Oral Questions to the Minister?

Mr. G. Brown: Before you answer, Mr. Speaker, will you take note that, as a result of this arrangement today, we lost the Minister of Defence, who should have been tinder the hammer? If you do consider this arrangement of Questions between Ministers, will you arrange that the Minister of Defence does not get behind a Minister who is currently very controversial?

Mr. Speaker: I am obliged to the right hon. Gentleman for illustrating the difficulty. Frankly, if one removes one target one will probably find that one is over-exposing or under-exposing another, but I will look at this question.

DIVISION No. 3 (CORRECTION)

Mr. W. Baxter: On a point of order, Mr. Speaker. On looking through the Votes and Proceedings today I noted that my name appears in the Division called at 11.31 p.m. last night on the Motion for an humble Address.

Mr. Speaker: Order. I have difficulty in hearing the hon. Member.

Mr. Baxter: I note that a Division was called at 11.31 p.m. last night, and that my name appears to have been placed among the "Noes" in the Division List. I should like that to be corrected, Sir, as I did not take part in the Division.

Mr. Speaker: I am obliged to the hon. Member. The matter having been drawn to my attention, the appropriate correction will be made.

R.A.F. TRANSPORT COMMAND AIRCRAFT (INCIDENT)

The following Question stood upon the Order Paper:

Mr. DE FREITAS: To ask the Secretary of State for Air whether he will make a further statement on the recent incident involving a Royal Air Force Comet in which Her Majesty the Queen was a passenger.

The Secretary of State for Air (Mr. Julian Amery): With your permission, Mr. Speaker, I will now answer Question No. 92.
The Anglo-German Committee of Investigation has completed its inquiry into the incident on 25th October involving the Comet of the Royal Air Force Transport Command in which Her Majesty the Queen was flying and two F.86 fighters of the Federal German Air Force.
The Committee visited all the headquarters and operational stations concerned. All personnel concerned in the incident were questioned, the Comet and F.86 aircraft were inspected and the relevant navigational charts and radar plots were checked.
The Committee found that the Comet was flying on its way from Copenhagen to London Airport in accordance with current air traffic procedures. The F.86 aircraft were carrying out a battle formation exercise from Oldenburg. They sighted condensation trails at a distance of 10 to 15 miles and closed on them from approximately an ahead position until they recognised what they subsequently described as a "transport or bomber type aircraft". They then pulled away. The Comet co-pilot could not know that the F.86 pilots had sighted him and acted correctly in reporting an air-miss.
The Committee has been unable to establish the exact distance by which the F.86 aircraft cleared the Comet, but it is satisfied that since weather conditions were clear, and the fighter pilots had the Comet in view the Whole time, there was no danger of a collision.
Even before the Committee of Investigation was convened the Federal German authorities had conveyed to our Embassy in Bonn expressions of regret that the

aircraft carrying Her Majesty the Queen should have been involved in such an incident. This statement has been agreed with the Federal German authorities.

Mr. de Freitas: Does the right hon. Gentleman realise that his statement gives little indication of what lessons have been learnt for the future? It is good to hear that there was no danger of a collision, but, whatever the degree of danger, will not the right hon. Gentleman use this incident to spur on the negotiations for joint civil and military air traffic control in Europe and a standardised system of air traffic notification? Will he also consult with the Minister of Aviation and study the correspondence begun by the Guild of Air Pilots in September, 1959, with his right hon. Friend, in which it drew attention to
. . the increasing danger of collision in the air …
and also asked for a standardised system and joint air traffic control?

Mr. Amery: We are satisfied that there was no danger of collision, and we also fully accept that the German pilots did not realise that Her Majesty was in the aircraft, and that there was no intended discourtesy. I think that we can, therefore, set our minds at rest on the two main issues of anxiety.
There remain the questions which the hon. Gentleman has raised as to how we should avoid things like this happening in future. I agree that it is wrong that they should happen. Let me give an example of the lessons that we are trying to learn. The Federal German authorities in this case had been given all the necessary information about the outward and return flight of the Comet, and promulgated this to all airfields, including Oldenberg.
At Oldenberg, details of both flights were brought to the notice of pilots concerned on the day of the outward flight, but they were not subsequently reminded of the return flight on the day of that flight, nor were they given special instructions. It is possible that if, on that day, special instructions had been given, or a reminder issued, the incident would not have taken place.
At the same time, it has been suggested that it might have been better if we had issued separate instructions, one for the outward flight and one for the


return flight, rather than a single Notice to Airmen covering both flights. But it has never been the practice to do this in the past and there could be objection to it. This is, however, one of the points we are looking at at the moment.
The hon. Gentleman also raised the question of agreed international procedures. This is a very relevant point. Naturally, we gave the German Federal authorities full details of the flights, including the passenger list, and told them of the precautions which we were taking in our air space. One of the officers also suggested, unofficially, to the German side that they might consider taking similar precautions on their side, but it is true that we did not make a formal request to the Federal German Air Force for special restrictions to be imposed on normal flying in the area through which the Comet was passing. We thought that this matter should be left to its discretion.
I agree that one of the lessons we should draw is that we should take up with our European neighbours some agreed procedure corresponding with what we call "purple airways" in this country. I will also look at the other point which the hon. Gentleman made about the correspondence which has passed previously with the Minister of Aviation.

Mr. Kershaw: What is the reason for the long delay in making this announcement? Has my hon. Friend noticed the mocking and disagreeable comments of the German Press to which this delay has given cause?

Mr. Amery: I do not think that delay has been serious. I thought it right not to wait for the full procedure to be carried out, because even now the recommendations of the Committee are still subject to review at higher levels on the German side and on our side. I thought it important to let the House know the position as soon as we possibly could, but I think it desirable, in a matter of this kind, to make a statement agreed with the Federal German authorities. These matters always take a little more time than one would expect.

Mr. Wade: Whoever the occupants may be, it is important that we should try to avoid the risk in an incident such

as this. I understood the right hon. Gentleman to say that the fighter pilots were not reminded of the return flight. In so far as that will require some change in procedure, can he give an assurance that this change will be introduced without delay?

Mr. Amery: The briefing of the fighter pilots is a matter for the Federal German authorities, not for me.

Sir A. V. Harvey: Will my right hon. Friend consider whether, on future occasions when Her Majesty is flying across European routes for comparatively short distances, her aircraft should have a small fighter escort which will show any military aircraft that there is somebody of importance on board and that it is not just a matter of an aircraft on an ordinary flight?

Mr. Amery: I would hope that that would not be necessary.

Mr. Rankin: Is the right hon. Gentleman not aware that in the initial stages when this business was raised his predecessor promised the House that he would get in touch with the Minister of Aviation, who is also concerned in the matter of a unified air control system not only this country but over Europe? Has that not been done? Also, are we to deduce from what the right hon. Gentleman has told us—it sounded very apologetic—that these German machines, in plain, simple language, buzzed the Comet, an act which has been deplored in this House and should be deplored once again and the Germans told about it? I hope that this will be done.

Mr. Amery: I am not very clear yet about the exact technical significance of "buzzed".

Mr. Rankin: If the right hon. Gentleman were in an aircraft he would know.

Mr. Amery: I think that they broke off short of buzzing range. With regard to the hon. Gentleman's earlier point—I know his interest in this matter—my right hon. Friend the Minister of Aviation and I are co-operating in these studies, but it will take a little time to bring the procedures into practice.

Mr. John Hall: Can my right hon. Friend say whether the radar stations


which were responsible for tracking the Comet were in touch throughout, and whether the Comet changed its height plan on the return flight?

Mr. Amery: The Comet was under constant radar surveillance. The German fighters were flying in clear weather conditions. They were not under radar control. There was no need for them, in the circumstances, to be under radar control. The Comet was flying under civil procedures and under the direction of the civil air authorities. There would have been a risk of confusion if we had attempted to impose some form of military radar control as well as civil direction. I have forgotten my hon. Friend's other point; perhaps he will remind me of it.

Mr. John Hall: It was whether the Comet's height plan was changed.

Mr. Amery: An amendment to the original notice to airmen was not passed to the German Air Force. It dealt with a minor change in height of 1,000 feet between 36,000 feet and 35,000 feet and had no bearing at all on the incident.

Mr. S. Silverman: Can the right hon. Gentleman say whether the pilot of the Comet shared the view that there was no danger of a collision, and will he bear in mind that there will be continual danger of this kind of thing happening, with consequences which are unpredictable, while we continue with the policy of providing West Germany with an Air Force?

Mr. Amery: The co-pilot realised that there was no danger of a collision and that the fighters were taking evasive action. This, I think, explains why he himself did not take any evasive action.

BILL PRESENTED

LICENSING

Bill to amend the Licensing Act, 1953, to make further provision about the sale and supply of intoxicating liquor and about licensed premises, and for purposes connected therewith, presented by Mr. R. A. Butler; supported by Mr. Henry Brooke, Mr. Maudling, The Attorney-General, Mr. Vosper, and Mr. Renton; read the First time; to be read a Second time tomorrow and to be printed. [Bill 13.]

PUBLIC INVESTMENT

3.44 p.m.

The Chancellor of the Exchequer (Mr. Selwyn Lloyd): I beg to move,
That this House takes note of the White Paper on Public Investment in Great Britain (Command Paper No. 1203) and welcomes the opportunity to debate the financial and economic implications of the programmes set out therein.
Before dealing specifically with the issues raised in the White Paper, I want to say something about the general economic position, which is the background against which the programmes of public investment have to be judged. There are certain aspects which give satisfaction and there are others which cause concern. I will begin with those which are the favourable feature.
First, we have a high level of employment. The number of people at work has been increasing steadily, and by September of this year it reached the record figure of 23,800,000. It has gone up by 400,000 in twelve months. The unemployment percentage in October was only 1·5 per cent.
Secondly, the productive capacity of our industries is for the most part fully engaged. The index of industrial production on the latest figures was 7 per cent. higher than in the same period of 1959.
Thirdly, we have had a remarkable degree of price stability since early 1958. The index of retail prices for September was 110, only 1 point above its level in the first half of 1958.
Fourthly, there is an upward trend in industrial investment. Plans for new industrial building and orders for new plant and machinery have been running at a high level all through the summer and autumn. The forecasts supplied to the Board of Trade by firms engaged in private industry and trade suggest that the fixed investments of these firms in 1960 is likely to be 20 per cent. higher than it was in 1959, and in manufacturing industries a further rise of 20 per cent. is expected in 1961. These forecasts are broadly confirmed by the inquiries which the Federation of British Industries makes of its member firms.
Those are the four satisfactory features in the situation, but it is not the whole story. There are other features which give me less satisfaction.
First, there is little doubt that in the early months of this year our economy had moved into a phase of excessive pressure on demand. This is a condition from which we have suffered from time to time throughout the post-war period, and the symptoms and consequences are by now familiar. If demand rises too much, we get shortages developing. Industry finds that essential materials are hard to come by and that components or items of capital equipment can be got only after lengthy delays. Shortages of labour develop, the pressure of home demand gets in the way of exports, while imports are stimulated. In such conditions it is only too easy for wages and profits to be raised at such a rate that price inflation is the inevitable consequence.
In the early part of the year, my predecessor decided that policy would have to be directed towards reducing the pressure of demand. Steps were, therefore, taken, including the raising of the Bank Rate, the imposition of restrictions on hire purchase and calls for special deposits from the banks. In my view, it was right to take these restrictive steps, and they have had their effect.
In the months up to April the pressure of demand had been reinforced by a rapid growth of credit, both hire purchase and bank lending. A good deal of the steam has been taken out of this now. Between the beginning of May and the end of September hire-purchase debt increased by £13 million, whereas in the same period last year there was a rise of £142 million. The present level is nearly £1,000 million. There has been a reduction in the rate of growth of bank advances, and the full effect of the measures in this direction has probably not yet been seen. Consumer expenditure has undoubtedly been restrained by these measures.
But, in case someone begins to talk of this as stagnation, the fact is that purchases in the shops have been running about 4 per cent. above the level of this time last year. I am well aware that the credit restrictions have nad a considerable impact on certain industries which have also had other causes of difficulties. I mean, of course, the motor industry and the industries producing consumer durables generally. I shall certainly ease those restrictions as soon as


I think that it is safe to do so, but we have to look at the needs of the economy as a whole.
This brings me to the present trend of costs and prices. It cannot be emphasised too strongly in the House or outside it that the price stability which we have enjoyed for the last two and a half years could rapidly disappear. It would be very easy for us as a nation to throw it away and go back again to the conditions of steadily rising prices from which we suffered in the years from 1945 to 1957. Of course, it is not possible to stabilise all prices, but what we want to avoid is a general upward pressure on costs.
The hon. Member for Newton (Mr. Lee), said last Wednesday that people who appeal for restraint should talk about profits as well as wages. Therefore, I shall begin with a word about profits. They are a relatively volatile element in the national economy. They do badly in times of trade recession and then recover rather sharply on the upswing. This seems to be what has been happening during the last eighteen months and it is interesting to note that if we take a run on recent years the percentage rise in company profits comes out much the same as the rise in wages and salaries. To some extent the same considerations apply to dividends, which have been going up considerably in the last year or two, but, despite this, they have not even now recovered their prewar relation to other elements of the national economy.
There are three points that I want to make about profits. It is too often forgotten that in a free society high and rising profits are needed to call forth and to finance high industrial investment, which is the essential means to economic expansion and higher standards of living. Secondly, about half of what is earned in company profits comes back to me in Income Tax and Profits Tax, and Surtax has also to be paid by those in the higher income groups who receive dividends.
Nevertheless, I believe it to be wise, both from the practical and the psychological point of view, that industry should pay regard not only to the importance of profits, but also to ensuring that consumers share in this increased prosperity.

The best way in which we can do that is by lower prices. That reduction of prices would be an important contribution to holding the cost of living stable, which is in the interests of everybody.
The rate of increase in wages and salaries must be compared with the general increase in productivity, and we are in the early stages of what looks like being an active season for wage and salary negotiations. In some cases the claims are following at a rather short interval on previous settlements which gave improvements either in wages, or in working hours, or in both, and these past settlements were themselves made in a period of stable prices. If new settlements are made without any regard for the implications for the economy, we shall certainly suffer a return to inflation. I read with particular interest what Lord Citrine said in another place on this matter yesterday, and I commend his wise words on this point.
Dealing with the next feature which is not so satisfactory, I come to the balance of payments, which is a source of anxiety. All through this year the trend of our exports has been downwards, while imports have gone on rising. At the same time, the calls to which we must respond for aid by grant or loan to the developing countries of the Commonwealth and elsewhere grow each year. Although our gold and convertible currency reserves have been rising month by month, this has been, in large part, the result of the comparatively high level of interest rates in London and does not mean that our overseas monetary position has improved. By this I mean that our short-term liabilities have risen a good deal more than our liquid assets.
One doubtful factor in these calculations is the rate of building up of stocks of imported materials and goods in process of production. On this it is very difficult to get adequate up-to-date information. I frankly admit that we want to improve our statistical equipment in this respect if we can, and this we are trying to do. If some money has gone into stocks then the position is not so bad, but taking even the most optimistic view on stocks I think that there has undoubtedly been a deterioration in our overall position.
I must also make the point that a good deal of the easing off, or rather the flattening out, of the pressure of demand which has taken place since these restrictive measures were put into force has been due to the falling off of exports. I hope that hon. Members will realise what a dangerous proceeding it would be, from the balance of payments point of view, for the Government to foster an increased level of home demand when exports are falling off. It is against that background, some of it good and some of it not so good, that we have to look at the White Paper.
As the House knows, this White Paper laid at this time of the year is a new departure. Its main purpose is the presentation of a fuller picture of the various public investment programmes in Great Britain at the earliest convenient date after decisions have been taken about their size. It is concerned with the nature of public investment programmes and not with the methods to be used to finance them. Government lending to finance them will be dealt with in a separate White Paper to be issued in the Spring. I think that the House will agree that to lay this White Paper at this time of the year is an improvement over what has been done in the past, because these matters have been dealt with intermittently and partially in the Economic Survey. Certainly, as Chancellor, I find it valuable to have this large and important sector of public expenditure delineated in this way.
The White Paper does not include Government aid to private industry by loans or by grants. That is a separate subject. If, however, the House wishes that information to be set out in some convenient form, I certainly would have no objection to doing so, but it is a separate matter from the public investment programmes which we are to discuss today. We have tried to give the maximum amount of information in the White Paper and yet keep it readable. I do not propose to take up a great deal of the time of the House in repeating what is said in the White Paper. I wish simply to emphasise certain salient points.
First, the size of the programme. The total approved for 1961–62 is £1,730 million. This is the same as the total for the programmes for 1960–61 as

known last summer. In fact, for the reasons given in paragraph 13, it is probable that there will be some shortfall this year and perhaps next year also, but compared with 1958–59 the figure is up by £260 million. This is a continuation of a process going on over a long period when there have been large increases in public investment.
Between 1950 and 1959 the total rose by 35 per cent. in real terms. Of the total, roughly two-fifths is carried out by the nationalised industries; another two-fifths by local authorities, and the remainder is an assortment of programmes mainly financed directly by the central Government of which the largest are those of the Post Office and the Atomic Energy Authority.
Taking, first, the nationalised industries, the total fixed investment in them in the five years ending next March will have been £3,300 million. Of the total capital needs of these industries, £2,100 million has been new money found by the Government. Part II of the White Paper contains a detailed breakdown of the programmes industry by industry, and the House will have noticed that, where appropriate, there are references to the published policy statements governing the development of the industry concerned.
Again, I will not recapitulate what has already been published, but my right hon. Friend the Minister of Power will speak last for the Government this evening, and he will deal with any detailed points which hon. Members may raise in the course of today's debate.
I would like to make these points about some of the main features. Peak demand for electricity is increasing at a rate which doubles itself every ten years. The industry is being transformed by technological developments, and there is no reason to expect any falling off in that rate of development. The coal industry, on the other hand, is contracting, and has been contracting, and this is reflected in the rate of investment. Although the gas industry is not expanding significantly, it is developing new methods of production. The British Transport Commission has been the subject of a recent debate. Questions about the Commission were asked during Question Time today, and my right hon. Friend the Minister of Transport


explained the basis on which finance for 1961–62 had been decided. Taking the case of these three industries, coal, gas, and transport, the figures are still very large indeed.
I want to make one specific point which, also, was dealt with at Question Time on Monday about the Air Corporations. The Corporations have just about doubled their traffic over the last five years, and they are ordering and bringing into service new fleets of aircraft. Their expenditure shows inevitably large fluctuations depending on the incidence of their purchase of aircraft. It has been suggested that the difference between these figures for 1960–61 and 1961–62 are in some way a slashing of the expenditure, or the development, of the Air Corporations. It is nothing of the sort. As my hon. Friend the Parliamentary Secretary to the Ministry of Aviation said on Monday, no cut is involved, and there is no change in the contemplated programmes.
The White Paper also deals with the social service investment.

Mr. Gerald Nabarro: I am in some confusion as to whether the large figures to which my right hon. and learned Friend has alluded, in respect of the investment programmes of nationalised industries—particularly delineated in Part II of the White Paper—include or exclude the contributions made by each industry from its own resources, or whether the figures quoted are in respect of new borrowing only.

Mr. Lloyd: The figures include the contributions made by each industry.
With regard to social service investment, first, there is the massive programme of housing by local authorities, amounting to almost £270 million a year. This is enabling good progress to be made in clearing slums, as well as providing for the overspill of big cities and the building of accommodation specially suitable for elderly people. The rest of social service investment covers a most important range of services—universities, schools, water and sewerage works, local health services and hospitals—some wholly paid for on the Votes, some by local authorities, and some aided by grants from the Government.
Investment expenditure on these amounted to £228 million in 1958–59, and the programmes for 1961–62 show a rise of nearly 40 per cent. on that figure. The programme for schools will go up by 15 per cent. this year and will provide 225,000 new places. Some of the rises are spectacular in terms of percentage. In respect of the universities there is a rise of 69 per cent. between 1958–59 and 1961–62; for water and sewerage the rise is 59 per cent., and for hospitals it is 56 per cent. There is also the road programme, which is financed partly by the Government and partly by local authorities. The expenditure for this programme is 69 per cent. greater in 1961–62 than the amount spent in 1958–59.
The responsibility for carrying out the greater part of the investment that I am describing is in the hands of a large number of public bodies. There are 27 gas and electricity boards, about 180 local education authorities, and 1,700 local housing authorities. This situation has an element of disadvantage and an element of advantage. Decentralisation of that sort inevitably limits to some extent the speed and precision with which Government policy can be implemented, but this diffuse responsibility is also a real source of strength. It means that the responsibility for executing the programmes lies with those who know at first hand the problems involved.
The next matter upon which I want to say something is the degree of flexibility in all this—the variations in public investment which it is feasible to make. The 1944 White Paper on Employment Policy foresaw the use of public investment as a major instrument of employment policy. It is still an important instrument, but is now only one among several. Fluctuations in economic activity since the war have been much smaller and shorter than previously. This has been true in general throughout the world. Monetary and fiscal measures, complemented by only marginal adjustments of public investment, have proved sufficient to prevent variations in economic activity on the prewar scale and length of cycle. We have also to remember that it is uneconomic and, indeed, inefficient to attempt either to accelerate or to retard a project once it has begun.
Unless reasonably firm plans are made well in advance it is impossible to get full value for money. Therefore, there is a large proportion of public investment which cannot sensibly be varied within the time scale which would be relevant. In any one year a very large proportion of public investment must consist of projects already in hand as a result of decisions taken in earlier years. Nevertheless, as the White Paper points out, there is a margin within which public investment can be expanded or contracted to help balance prospective economic fluctuations. As my predecessor pointed out in a speech which he made last June to the Association of Municipal Treasurers, we estimate that a variation up or down of £30 million to £50 million can be achieved in twelve or eighteen months without unduly dislocating the programmes.
In considering the whole range of expenditure certain important facts must be remembered. First, obviously enough, these programmes taken together make a big draft on our national resources. A great dead of it is directly financed from the Exchequer, and all of it is expenditure of public funds in one form or another. Many of these programmes are on a strongly rising trend. Hardly any of them is going down to make room for other rising demands.
Secondly, it is often forgotten that this growth of public investment frequently leads to more Government current expenditure. The new schools, technical colleges and hospitals will provide more and better services, but they will also increase the bill for running costs. I have to consider this in the context of constantly increasing demands for more and more expenditure.
Another point which applies to the investment programmes of the nationalised industries is that the products of these industries are basic to the functioning of the economy. But this does not mean that every scheme for improving or expanding their facilities must be sacrosanct. There has to be a criterion for deciding which of the many possible projects are put into the programme. That criterion must be that investment should be expected to justify itself by its return in higher production or reduced costs. I am not suggesting that

this return should necessarily match the returns obtained on the investments of private industry and trade generally, but it should be a return which will cover depreciation, obsolescence and interest, and still leave something to build up reserves. That is the criterion at which we must aim in this matter.
It has been said that, as a nation, we are being left behind in the economic contest because we are not investing enough. In fact, between 1950 and 1959 total investment in this country grew by nearly half at constant prices, with public investment up by 35 per cent. and private investment up by over 50 per cent. The point that gives cause for reflection is that the rate of growth of investment was double the rate of growth of the gross national product.
Moreover, we have to take into account our investment abroad, which amounted in net terms to about £2,000 million in the ten years from 1950 to 1959. In addition, there is Government lending overseas, which has recently grown fast. This year—1960—it will amount to about £150 million. In the orgy of self-denigration in which we seem to like indulging, that remarkable figure for private investment overseas is always left out of the calculations. Nevertheless, this subject of national economic growth is not one on which we, as a nation—or any party or Government—have any right to feel complacent. I am glad to see that P.E.P. has been making a study of this subject, and there is much food for thought in its report, "Growth in the British Economy", which it has recently published.
There are, of course, the statistics—the league table—in which the Unitied Kingdom holds a low place. But percentages depend upon the level from which the start is made. They also depend upon what factors are taken into account. I have given one; we give no credit for the £2,000 million of overseas investment.

Mr. Bruce Millan: Surely the percentages of the gross national product which go into investment do not depend on the starting point.

Mr. Lloyd: My point is that in considering the degree of national resources


going into investment we should also include the overseas investment.
I think that we have to examine very seriously the factors in our institutions, in our national habits, or in our economic environment, which may prevent us from having as high a rate of economic expansion as we should like to see. This examination must cover our international position and the need for safeguarding sterling as a world currency. It must cover questions of incentives and tax structure, as well as restrictive practices and the impediments to the movement of labour and other productive resources.
Also, it is not simply a matter of the rate of investment in this country, but of our ability to make the most of our productive facilities once the investment has been made. It seems to me that there is a twofold relation between the needs of economic expansion and the public investment programme. On the one hand, it is essential that the productive capacity of the public sector should be developed at a sufficient rate to make possible the full realisation of the possibilities of growth by the private sector. We have to make sure that there will be enough fuel and transport facilities, schools and universities, to support the higher levels of production which will be possible in the future.
On the other hand, nothing is more damaging to economic expansion than the misapplication of investment resources and this emphasises the importance of having a proper criterion for settling the scale and allocation of investment in these public programmes, particularly those of the nationalised industries. Our overall aim must be economic expansion without inflation, and the maintenance of stability without stagnation. At the same time, we have to realise that the economic challenges of the 1960s will be different and more testing than those of the 1950s. In relation to these matters I believe that the plans set out in the White Paper represent a public investment programme of the right scale and of the right pattern.

4.11 p.m.

Mr. Frederick Lee: To use the time-honoured formula, it falls to me to congratulate the right hon. and learned Chancellor of the Exchequer on

his "maiden speech." We noticed that he avoided the more contentious matters, as becomes a "maiden speaker". We look forward to many interventions from him in future debates when, perhaps, he can embrace more of the contentious parts of the subject which he is discussing.
On looking at the Motion on the Order Paper I am at a loss to understand its wording. The House is invited to welcome
the opportunity to debate the financial and economic implications …
of the White Paper on Public Investment. Do we take it that the Government cannot achieve unanimity in recommending the contents of the White Paper to the House? Is not it somewhat unusual for the Government to ask us to welcome the opportunity to debate the financial and economic implications rather than to tell us that they are wholeheartedly enthusiastic about the production of the White Paper and that they are completely unanimous in their endorsement of it?
The right hon. and learned Gentleman took us through a series of points, but I think that he studiously avoided the more contentious issues concerning the Government's attitude towards the public sector so far as investment goes. However, he did raise one or two matters about which we should like to question him. He pointed out that I said the other night that wages are not rising much, whereas dividends are rising considerably during this year. He pointed out that profit and dividends have not yet reached anything like the relationship to wages that they enjoyed in pre-war days.
May we take it that this is, in fact, the object of the exercise; that the long-term ultimate to which the Government are looking is to be able to get back to the sort of relationship we saw in pre-war days? If it is, I suggest that there will be fun and games on quite a comprehensive scale before long.
The right hon. and learned Gentleman mentioned the amount of subsidy which private enterprise is now receiving from the Government, subsidies and public moneys, and he referred to something, which I think my right hon. Friend the Member for Huyton (Mr. H. Wilson) has suggested on one or two occasions, that


we should have an analysis of this. We should welcome the production of a White Paper on this matter so that we may analyse precisely what is happening in this respect. In one part of his argument the right hon. and learned Gentleman showed clearly one of the differences between the two sides of the House on this matter, when he was saying something to the effect that monetary and financial measures supplemented by cuts in public investment, and so on. This phrase of itself pinpoints one of the great differences between the two sides of the House, as I shall try to show in the course of my speech.
I know that in looking at this problem one can, if one is not very careful, get bogged down in a whole series of figures. Indeed, when we begin to consider it we find ourselves with red eyes, White Papers and Blue Books, and become so saturated with figures that they lose all meaning. So vast is the range of this subject that in a single speech one must restrict oneself to discussing a certain aspect of it. I wish to look at the nationalised industries as such. If they are fortunate enough to catch your eye, Mr. Speaker, a number of my right hon. and hon. Friends will discuss other parts of the public sector.
If the subject matter is lacking in emotional tone it is not without a touch of humour. When we think of the attempts of the Tory Party to minimise the scope and effect of public enterprise, followed by the presentation of a White Paper revealing what a huge sector of the British economy is now covered by public enterprise, it is astounding that people generally still do not understand what an important sector of our total economy the public sector has now become. I have said before, and I repeat it, that we believe that the Government accept this sector grudgingly; they attempt to hold it back, and in so doing, they inflict great and quite unnecessary damage on our economy.
When the Government reach the point when they can no longer oppose it, they seek to use the investment programme of the public sector as a balancing mechanism between global investment and investment in the private sector, and that, I think, is a paraphrase of what the right hon. and learned Gentleman was saying. Their somewhat Canute-like resistance

to the onward march of events has resulted in the creation of a third sector, allegedly private but entirely dependent for its efficiency on doles of public money. We may include in this sector the aircraft industry, shipbuilding, cotton, some parts of steel and agriculture, and, therefore—

Mr. Nabarro: Motor cars.

Mr. Lee: If the hon. Gentleman wishes to add to the sector, that is all right with me.
We are faced with the position that we cannot have a clear debate on the private sector and the public sector because this intermediate thing is becoming yearly a bigger and a more vital element within the total economy. I have just used the expression "the onward march of events". I know that the Government will from time to time enforce a static public sector and that there may be times when it is even in a decline.
This could happen when the temptation to claw back those industries which can still be used as a vehicle for profit-taking proves stronger than the contemplation of such minor considerations as the well-being of the nation. Steel is the outstanding example of that attitude at the moment; and we must not forget the contribution to the chaos on the roads, costing industry hundreds of millions of pounds, which was caused by the attempt to denationalise road transport.
I complain that the outstanding successes achieved in the public sector have never really been given the full advertisement that they deserve. Perhaps some of us on this side of the House are somewhat remiss in this as well. Especially I believe that the absence of the profit motive from some sections of our publicly-owned industry has been the cause of very great advances and of benefit to the public. Mr. Shonfield in the Observer last Sunday, when referring to the electricity industry, wrote this:
The consumer of electric power has had the direct benefit of some extraordinary reductions in costs during the past ten years, which in private industry would have been reflected in fantastically high profits. The advance of technology in this industry is so rapid that vast returns in higher efficiency are obtained merely by the normal process of getting rid of old machinery when, as it is worn out and replacing it with new.
If we look at the overall position of investment in this sector, as distinct from


the private sector, we see that it is not determined by the needs of the sector, but by what is left over after the private sector has had what it desires in the way of investment.
The right hon. Gentleman spoke about our position in the world and these investment cuts. I have a table here as well—the United Kingdom World Economic Survey, 1959. It lists 12 of the major industrial nations of the world. If we look at the gross fixed capital formation as a percentage of output Britain is at the bottom of the league. If we look at the gross production investment as a percentage of output we are next to the bottom, and if we look at the growth of output percentages per year, again we are at the bottom of the league. So, too, if we look at the growth of output per worker as a percentage of the year, again we are at the bottom of the league.

Mr. R. Gresham Cooke: For what period?

Mr. Lee: The nine years since 1950.
This cannot give the Government or their supporters any great satisfaction, especially when we consider that as an investing nation we are more dependent on industrial efficiency than practically any other nation because of the large percentage of manufactured exports required if we are to live decently. That picture, inadequate as it is, which I have presented, shows perhaps a slightly different picture of the record of the Tory Government than that contained in the "You have never had it so good" approach which we hear so often from the Prime Minister and other Ministers.
Appendix I of the White Paper, page 30, covers that which does and which does not appear. The only capital formation of private bodies financed from public funds which appears in the White Paper are those of the University Grants Committee, but we see what a vast sector the public one is. In 1958–59, the total extent of public investment was £1,470 million and in 1959–60, £1,618 million. The attitude of the Government on which I have already commented appears very clearly in the various parts of the White Paper. If we look, for instance, at paragraph 10, it says:
In recent years there have been adjustments in both directions. In 1957 steps were taken to moderate a rate of public investment which

would otherwise have imposed an excessive strain on resources; late in 1958 circumstances had changed and the Government took action to stimulate the rate of expenditure in certain programmes.
Paragraph 14 states:
In the summer of 1960 it was apparent that a state of excessive demand was developing. The Government therefore decided … the approved level of total public investment in 1961–62 would be held to that of 1960–61.
Paragraph 6 states:
Public investment is thus an important element in total demand on the resources of the country and the long-term aims of economic policy could be jeopardised in periods of high demand if it were allowed to place too much strain on resources, in particular those of the industries directly concerned.
In other words, the moment their own policies get us into the position in which they feel that the economy is overloaded the question must be resolved by cuts in the programmes of the public sector.
Again, there is the fluctuation which we see in these programmes. In July, 1955, reductions were announced in the capital programmes of nationalised industries, local authorities and central government. These were given in the autumn Budget of 26th October, which we all remember came after the General Election. In February, 1956, public investment programmes were reduced by a further £70 million. In 1957, public investment was held down to 1957–58 level. It had been intended to allow it to rise substantially in 1958–59. In May, 1958, the September, 1957, programme for the railways was modified, and the limits for 1958 and 1959 together were raised by £25 million. In 1958, it was announced that the Government envisaged a rise of £125 million to £150 million, following on the 1957 squeeze which had got the economy into an awful mess, and in June of this year the Government announced that they intended to keep investment in 1961–62 down to the 1959–60 level.
Seldom before, when we look at the phrases which I have used from this report, have the Government so blatantly paraded prejudice as a policy. What this amounts to is that the private sector investment will be decided by what industrialists happen to fancy, and the public sector investment decided by whatever there is left over after all other claims have been satisfied. What the economic situation needs in the way of


investment does not seem to enter into their consideration at all. It appears that national need will continue to be sacrificed to the Government's doctrinaire prejudice against the public sector.
This attitude not only prejudices and negatives. It implies certain assumptions which, I should have thought, even Government supporters must know are quite unsound. The automatic priority of private sector investment over public sector investment just will not stand serious examination. No one can seriously suggest that when resources are short locomotives should make way for lawn mowers. That is just the kind of ludicrous scale of values applied by the Government's manipulation of public investment to balance uncontrolled fluctuations in private investment.
This attitude of the Government implies that not only private investment, but private consumption, also, should have automatic priority over public investment. Is there anything that could be more irresponsible and short-sighted than to allow carefully worked out, important long-term investment programmes to be arbitrarily boosted up and beaten down again to fit in with electoral convenience?
I am trying to show that when we have a difficult economy, such as this, we cannot possibly leave one huge sector entirely free concerning investment, and, at the same time, restrict the investment policies and programmes in the huge public sector without doing very great harm to the whole of the economy. My conviction is that much of this is political cowardice.

Mr. Nabarro: The hon. Member should be careful. He must realise that free speech means that one may call a spade a spade, but not a coward a coward.

Mr. Lee: I am sorry if I was treading on any toes. I had no thought in that direction.
Can we really believe that the political cowardice which encourages booms in consumer goods industries to coincide with a General Election, which of itself then creates the very conditions which, under this Government at least, enforce curtailment of investment in the public sector, will cease so long as the Government

have their present approach to investment in the public sector? They do it, as I have tried to show, without regard to the long-term damage which they inflict upon it.
For instance, one of the prices which we are now paying for the cowardice of the period prior to the last election is that between April and September we experienced six months of stagnation in industrial production. I have been reading as much as I can of the advice which the City editors and the financial pundits in general submit to the Government. It is worth noticing that the orthodox approach which they have—in other words, which coincides with the Government policy—is such that hardly any worthwhile suggestion as to how we can break through this high-level stagnation, as the Americans call it—the malady from which we are now suffering—are forthcoming from any of the orthodox financial pundits.
The fact is that given a reliance on purely monetary manipulations, I do not believe that there is any answer. There is a basic unbalance in our economy. Periods of credit squeeze and of high interest rates to damp down investment merely exacerbate that unbalance in terms of our inability to export. At the end of such periods, permanent recovery is further away than ever as our competitors increase the efficiency gap between their industrial methods and our own. I am not arguing that we can do all the investment that is required over a relatively short period. I am saying that we must plan carefully the direction of our investment and ensure that we get our priorities right.
That being so, we see that the political dogma of the Government becomes an insurmountable obstruction to the logic of the requirements of our economy. One of the main conclusions of the P.E.P. reports, to which the Chancellor of the Exchequer referred, states:
Not only has Britain been investing a smaller proportion of her national product than most other countries, but the yield on the investments undertaken has been disappointingly low.
It goes on to point out that if the present trends continue they would
leave Britain with a lower standard of living than several other European countries within a few years.


It is, therefore, necessary for us to start at the point that a high investment economy is utterly essential to this nation if 50 million people are to enjoy good living standards in a small island which is not particularly well endowed with indigenous raw materials.
It is in the light of these requirements that I view the White Paper and the main lines of the Government's lack of policy in investment in the public sector as quite inadequate and indicative of an attitude of public investment which is doctrinaire, irresponsible, short-sighted and incompetent. Indeed, the Government appear to be a little shy of using such words as "planning" even in the White Paper. They make no attempt to look more than a year ahead, even though the need for longer-term planning is admitted. No attempt is made to include the private sector, which accounts for over half of our total investment. No attempt is made to ensure that investment is adequate in total or concentrated in the right direction to provide adequate economic expansion, to protect the balance of payments or achieve any other clear objective. Nor is any attempt made to set priorities between different kinds of investment, still less between the needs of investment and the claims of other social or economic policies.
The only aspect of the Government's intentions that emerges is their continued determination to sacrifice national needs to party prejudice. Public investment, it would seem, will continue to be cut arbitrarily and repeatedly to balance the fluctuations in unregulated private investment and to cover up the failures of the Government's other economic policies as they stumble along from one unnecessary crisis to another. Their planning is not only belated and reluctant it is mischievous and highly irresponsible.
I have said that there is no long-term planning. The tendency of the Government seems to be to dither and drift along from one short-term expediency to another in the absence of any clear, long-term purpose or sense of direction. The statistics of public investment which we have been given extend only to 1960–61. In paragraph 11, for instance, the Government, by inference, admit that no serious attempt is made to co-ordinate

investment plans or even to assess the size of the total until the summer of the previous year. While doing that, they admit, in paragraph 9, that a crucially important requirement for efficiency in investment planning is that the programme should be carried through steadily over a long-term period and not be subject to short-term changes in pace or direction.
If forward planning is desirable at all, why cannot we plan over, say, a five or ten-year period? Other countries do it. In France, for example, the Government publication of long-term investment plans has been a major factor not only in ensuring a continuous high-level of investment, both public and private, but also in ensuring proper co-ordination within the total. As we all know, in France there has often been weak Government or no Government at all. This is evidently preferable to the impediment of having a Conservative Government in power.
We have reached the stage where the Government have elevated abdication to the level of principle. Consider, for example, a matter which we have discussed at Question Time. The Minister of Transport told us on 26th October that we were to have a cut in the railway programme. There was no argument from him that this was necessary on the ground that the railways themselves do not require the money. He merely told us that the maximum expenditure on the railways would be £140 million compared with the £160 million originally agreed for the current year and that the Transport Commission will be cut from £200 million to £175 million. And yet the same Minister asserts from the Dispatch Box that he can plan a road programme for five or more years ahead. Surely it is far more difficult for those who are trying to plan a railway system to be able to do so successfully and adequately on a year-to-year basis than it is to conduct such operations in a road undertaking.
Therefore, why it is not possible for a long-term programme to be announced for the railways which will not be cut down merely because of the problems of the balance of payments, I have never understood. One would like to hear the Minister of Transport explain this. The Chancellor of the Exchequer said just now that some elements in the public sector have to be cut because they do


not show an immediate return. How does that apply to, say, the railways? Is it to be the case that whereas we can have modernised track, we must put up with an old one and draughty station because the one gives a quicker and better investment return than the other. The phasing of the whole programme gets out of balance once one begins to indulge in that kind of thing.
I suppose that the restrictions on the economy, including the holding down of public investment, are primarily due to the very unsatisfactory state of the balance of payments. While it is necessary to have increasing exports—and we all know that the export drive has failed lamentably—we must also consider the effects of the rapidly increasing imports of unnecessary goods which mistakes in Government policy have now brought about.
Let us take one example in that respect—the enormous increase of fuel oil imports to levels which are quite unnecessary in view of the plentiful supply of home-produced fuels. While we are on the subject of White Papers, I think that we should have one showing the precise effect of these huge imports of fuel oil on the balance of payments. I know that there is scope for great argument here, but my own feeling is that those imports are a very great drain on the balance of payments and that it is high time that the House had an objective survey of the precise effect on the balance of payments of those huge imports. Their free admission is in direct contrast to the policies pursued by countries such as the United States, Germany and France, whose Governments have imposed restrictions to protect home resources of fuel.
Last Wednesday, I gave figures of the vast increases in these imports of fuel. My party has already produced a short-term policy statement on the need for a national fuel policy. We have circulated it and we believe that it shows the right approach to what is now a serious problem. For this country, the genesis of industrial and economic health lies in a properly planned fuel and energy policy, a modern machine tool industry, a modern transport system and a large expansion of scientific and technical training. None of those is in sight.
The P.E.P. report mentioned a suggestion by Sir Ivan Stedeford, who is greatly trusted by hon. Members opposite and who said that there should be a central organisation to forecast the nation's capital needs for a few years ahead and then to issue warnings in good time when plans incompatible with the economy were being shaped by the public or private sectors. Can we know whether Sir Ivan's thinking on this subject is being considered by the Government? Can we know, before the end of the debate, whether we can expect any move in that direction?
I prefer the much more positive suggestion in the report that the Government should plan the contribution towards our economic growth by each of our major industries. Much longer-term plans for the public sector must be announced and adhered to. It is ridiculous that the public sector which is responsible for about 40 per cent. of all public investment, should be treated in the hand-to-mouth way which has been customary under the present Government. It is the Government's quite doctrinaire unwillingness to use effective physical or budgetary controls or to control consumption which results in investment in the public sector being the one which always has to be cut.
The lack of the kind of policy of which I am speaking has been a major factor contributing to the economy's poor performance in recent years. In the absence of effective Government action, investment to meet long-term future needs has readily been sacrificed to cover short-term crises, and the average level of investment in both public and private sectors has been far too low.
In consequence, expansion of the economy has been slower than that of almost any other industrial country—I have already given the tables to the House. Our exports are increasing more slowly than those of our competitors and our share of world trade is declining every year. The weakness of the economy makes it vulnerable to periodic balance of payments difficulties and speculation against sterling. The perpetual threat of inflation has been one of the features of so many of the post-war years and I do not believe that we can get over it merely by short-term expedients which


do not recognise the basic unbalance in the economy itself.
I have said that we need new and effective policies to deal with the problem. I was extremely disappointed that the Chancellor seemed quite complacent and of opinion that all that needed to be done was to have periodic high interest rates and a credit squeeze, then letting the economy rip and, within a short time, again having high interest rates and another credit squeeze, and so on. We suggest other methods. We believe that a consistently high rate of investment must be aimed at and given very high priority against competing claims for resources. The investment programmes of the public industries must be drawn up well in advance and provide for a steady expansion over long periods. A national investment board needs to be set up to ensure that they are related both to each other and to other national objectives.
A national investment board must also secure from the private firms details of their investment plans so that it can analyse them and ensure that they are adjusted to accord with national objectives for the private sector. Special emphasis must be placed in both sectors on investment likely to save imports, increase exports, reduce local unemployment, help to finance underdeveloped countries, or further social or political aims of that kind. Where investment cuts are unavoidable, they should be concentrated on the frills rather than the fundamentals of the economy and, in particular, on the types of investment which can readily be adjusted at short notice without serious loss.
Balance of payments difficulties are likely to be a diminishing problem with industry expanding and gaining in competitive efficiency, but in so far as the immediate effect of expansion may be to increase imports more than exports the balance must not be adjusted at the expense of investment. There are many alternatives to the Government's policy of panic cuts in long-term investments—measures to reduce inessential imports, maybe the temporarily running down the reserves, lowering interest rates to reduce their burden and reviewing our overseas defence commitments. Those are suggestions which we feel now to be essential if the country is to make a

permanent recovery from the stagnation which Government policies have brought to us.
Balance of payments problems and rates of investment in the public sectors of industry, and so on, are not subjects which spark a flame of enthusiasm in millions of breasts. It is up to my hon. Friends to say that failure in those things is a reflection of the complete collapse of the only type of economic policies which the Tories are prepared to consider. Dogma and prejudice now threaten economic stability and advance. This is, therefore, an issue upon which we must indict a weak and vacillating Government.
The economic policies for which we stand are the only alternatives to stagnation and a lowering of the living standards of our people. We are particularly concerned, when we think of peace and war, that two-thirds of the world's population live below the starvation level and that this country is ineffective in being able to do anything to remedy those things so long as the Government are reduced to the levels which I have described.
It is, therefore, a great necessity for Britain that the Labour movement should again become imbued with the great enthusiasm which we once knew, for only by reflecting it in that way can we again convince the British people that the peace of the world depends upon the type of expansive economic policy for which only the Labour movement stands.
I have said that these issues may well not be of the kind which stir men's breasts. I am sure that if my hon. Friends can put it in this way—the production of a great surplus which we can then use to help others less fortunate than ourselves—this kind of thing can be used as a great way to unification and a great way forward to the day again when a huge concourse of devoted Labour Members can sit on the benches opposite and a great Labour Government can show the way forward from poverty and stagnation to decency and peace.

4.50 p.m.

Sir Toby Low: I must assume that the hon. Member for Newton (Mr. Lee) was addressing the remarks in the last four or five minutes


of his speech to his own supporters. He certainly showed us his back for the last four or five minutes. I think he must have been looking at one of the cartoons that we saw recently in the newspapers.
I am sure that the whole House, including the hon. Gentleman opposite, would like to welcome my right hon. and learned Friend the Chancellor of the Exchequer in his first speech to the House as Chancellor. He showed that he had maintained the very high standard which he has always observed as Foreign Secretary, and those of us who take part in economic debates are delighted to have one starting, as this one started, with that kind of speech from my right hon. and leerned Friend.
The hon. Member for Newton was a surprise to me, I thought we might have heard a witty speech from his right hon. Friend the Member for Huyton (Mr. H. Wilson), and I was wondering during the course of that speech whether we would have done better to have that or the speech of the hon. Member for Newton, who has a different kind of humour, which he put before the House. The hon. Gentleman seemed to me to be directing his attack at a target which was a fiction of his own imagination. Some of the things which he has ascribed to the Government suggest that he has paid no attention to statements of Government policy or to debates on Government policy in this House in the last eight years. He gave us all that tremendous nonsense about stagnation. Stagnation my foot, if I may say so to him.

Mr. Lee: Not statements of Government policy; I have been looking at the effects of them.

Sir T. Low: Perhaps the hon. Gentleman will have some more looks at the effects of Government policy, one of which has been a tremendous upsurge in savings, without which investment is not possible. We may talk about investment—and here I agree with the hon. Gentleman, because I passionately want to see a high investment economy here—but we must have the savings, and, anyway, we have to remember that investment is not much good if there is not also consumption. We have to try to get a balance in these things.
Another statement of the hon. Gentleman that amused me very much was when he said that the absence of the profit motive had been a great advantage to the nationalised industries. If he can believe that he can believe anything. He went on to quote the results of the electricity industry, which is the one industry that has made a good profit, which seems to me a most surprising comment to make.

Mr. Norman Pentland: Will not the hon. Gentleman agree that another nationalised industry, the National Coal Board, was deprived of making a profit for many years?

Sir T. Low: If the hon. Gentleman will assist me in proceeding to discuss these matters, I think he will see that I have some sympathy with what he says. If he reads the Reports of the Select Committee on the Nationalised Industries which dealt with the National Coal Board two years ago, he will see the views expressed by that Committee, an all-party Committee, of which I was Chairman. I still hold to all the views which that Committee has expressed since I have been its Chairman, and it is on this very important subject that I wish to concentrate my speech.
First, I want to make one further remark about profits in the context of the speech of the hon. Member for Newton. I think it is a mistake for the hon. Gentleman to get frightened if profits go up. If profits do not go up, we shall never get the savings sufficient to finance the tremendous investment we want. What I want to see is a wider sharing of profits, and I am delighted to find on my right and my left my hon. Friends the Members for Halifax (Mr. M. Macmillan) and Twickenham (Mr. Gresham Cooke), who have taken such a leading part in the movement for a wider sharing of ownership in industry. I believe that that will help the hon. Gentleman much more than those rather ridiculous, dogmatic and doctrinaire suggestions which he was putting to us.
I should like now to deal with the matter of investment in the nationalised industries and to leave out of consideration in the few remarks I am to make to the House the other very important part of the public sector, because I believe that investment in the nationalised industries raises different


points to the many issues that affect some of the other public investment. The first thing that worries the Government and the House is what should be the test that decides the total sum that can be invested. Here we are in a difficulty as to what we mean by "invested" by the Government.
It would appear from the Government White Paper that when they say that two main factors, among the many which they have taken into account—the aim of expansion and the balance between demand and resources—are the things which fix the total sum that can be invested, they are talking about the total sum that should be expended by the nationalised industries. I should like to put to my right hon. and learned Friend a doubt which I have in my own mind whether that is right; or whether we should rather concern ourselves, not with the expenditure on investment in the nationalised industries, but with the amounts which the nationalised industries borrow as new money from my right hon. Friend. They are very different amounts. They differ by the amount of depreciation and provision put away, plus profits earned by the nationalised industries, and these sums can be very considerable. The more the profits, the more proper depreciation that is put away by the nationalised industries, the more money they have under their own control which is then available for investment.
I notice that in the White Paper remarks are made which indicate that the Government considered that they should control the actual investment expenditure each year of the nationalised industries. In the course of three inquiries which I have made with the Select Committee on the Nationalised Industries, it has been made quite clear to us that, in law, the Government have no statutory power at all to control the annual capital expenditure of the nationalised industries. They have power, of course, over the borrowing and long-term programme of reorganisation and development, which have to be discussed with Ministers and approved by them, but they have no statutory power over the annual expenditure as such. I assume that when, in the general words of paragraph 11, the White Paper says:

Levels of expenditure are approved for public investment as a whole and for each programme.
that does not mean that Ministers are now going beyond what they are statutorily required to do by the Acts of Parliament which set up the nationalised industries.
I regard this as quite important. I do not think we will ever get the nationalised industries to operate properly, to plan and control their investment properly, if we or the Government try to do their work for them. They are the people who have the responsibility placed upon them by Act of Parliament, and in my view, and I think this was also the view of three Select Committees, they should be encouraged to do that without interference by the Government, except on matters for which the Government have definite responsibility. The most important matter for which the Government have a definite responsibility is the provision of finance. I know that we are to have further information about the finance which is to be made available from the Government to the nationalised industries during the forthcoming year, which is to be given in a White Paper or in the Economic Survey in the spring. That seems to me the most important thing which we ought to be told. It is the size of these borrowings and the increase of them which have worried some of us on these benches and some hon. Members opposite.
Here, I think that it would be wise to turn to the economic statistics. How long can we go on expecting the profits of the private sector of industry to finance such a large part of the investment of the public sector of industry? That is what happens at the moment, whether by taxation, borowings or anything else. I am not saying that we want a rigid distinction. Of course we do not. But, taking the 1959 figures, savings in the private sector amounted to over £3,000 million. Investment in the private sector was about two-thirds of that amount. Savings by public corporations amounted to under £200 million, and their investment expenditure was over £750 million. There is this sharp contrast of which the House ought to be aware.
How should we deal with that situation? We should not, I hasten to assure


hon. Members opposite, cut the investment of nationalised industries. What we should be thinking of is more sensible price policies in the nationalised industries and more commercial methods of operating the nationalised industries and therefore greater efficiency. That is why the Government's declared intention to improve the commercial management and running of the nationalised industries is linked with this very important question of the control of public investment, particularly of investment in the nationalised industries.

Mr. Pentland: Can the right hon. Gentleman tell me in which way the Government intend to do that?

Sir T. Low: Fortunately, this is a Government which gives consideration to things which are said in debate in this House. The other day we had a debate on the railways. The Minister of Transport said that he would carefully consider that and the various reports and would produce a White Paper before Christmas. I do not think that the Government are doing too badly at the moment.
If we are concerned at the moment about the return we get from nationalised industries investment, I do not think that we can look forward to efficient nationalised industries which, at any rate for the next five years, do not need some form of subsidised help from the State. I say that to show that when I pass, as I am about to do, to considering the proper test of whether money should be lent for an investment scheme in a nationalised industry, I do not think that the economic test is the only one which can be applied by a Government at the present time or in the foreseeable future. But I think that it is the main and the first test. I was delighted to hear what my right hon. and learned Friend had to say about the criteria.

Mr. Francis Noel-Baker: Has not the right hon. Gentleman given an incomplete and unfair picture of the situation? When he points to the level of savings in private industry and investment in public industry, should not he mention the very large area of allegedly private industry which is dependent on Government subsidy—agriculture, steel, the aircraft industry, and so on? Surely that is relevant to his argument.

Sir T. Low: If the House wanted me to make a 45 or 50 minute speech, I would cover those very important points. But if the hon. Gentleman looks at the figures which I have given, he will see that, even taking account of all that, the force of my argument still remains. I ask him to realise that there is this great contrast in the availability of savings on the one hand and expenditure an the other between the private and public sectors. I said that the first step to put this right is to get the pricing policies right and commercial efficiency. I think that the House is with me on that. Certainly the Select Committee agrees with it.
I now pass to the economic test. If the Government lends money to nationalised industries, how does one test whether the purpose for which they are asked to lend money is a good or bad one? I certainly think that, first, one should see that the scheme which is put forward makes a sufficient contribution to earnings after depreciation and all the other charges which should be put against it. I agree with what the Chancellor of the Exchequer said. I think that it is very difficult to lay down exactly what sort of return in percentage yield one should expect to get.
Hon. Members who have read the Report of the Select Committee will have observed what The Times called, in a leading article, the wrangle which took place about the yield calculated from the London-Midland Region electrification scheme. Even with some experience in dealing with industrial investment, I have found it extremely difficult to make up my mind about the proper way in which one should work out the yield from any investment like that.
In the nationalised industries sector we are in a great difficulty. For reasons which the party opposite ought to know even better than we do, modernisation was greatly delayed. There was also a delay in replacement. In many modernisation schemes, Whether in the coal or railway industries, there is a large element of straight replacement from which one does not expect to get a high return, if any return at all. There is therefore a very complicated exercise to be done by the Government and those in authority in working out the proper return Which one should get from big investments.
We are told that in the private sector an investment in a big scheme is not thought to be worth much unless it gives at least a 14 per cent. return. It may be that we should try to get such a return on some investments in nationalised industries. Obviously it will not be possible to get it in all, for the reasons which I have given. But it is important that there should be a good return from productive schemes to pay for the research, and so on, which the hon. Member for Newton had in mind which will not give a large and direct increase in earnings.
All these things are extremely important. In my experience of cross-examining members of Government Departments, I have had a doubt in my mind as to whether the Government machine has developed sufficiently to deal with this new problem.

Mr. Lee: indicated assent.

Sir T. Low: The hon. Gentleman for Newton assents to that proposition. It is a new problem which has arisen since the nationalisation Acts became law. I hope that the Government are looking at the machinery which they have and that they will take advice from those who in other spheres in the private sector have experience in checking large investment schemes and in approving the finance for them.
I suggested during the debate on the railways that an informal advisory council might be set up to help the Treasury to have a look at these schemes, very much like the Export Credits Advisory Council does for export credits, though it has some statutory functions, too. Such a body might be of great advantage at a time when we are in a new sphere dealing with vast sums which are bound to raise doubts from time to time in the minds of right hon. and hon. Members who feel that they have a responsibility for the control of Government money. I think that it is a very good thing that we should have had this increased feeling in the last few Sessions about the importance of the House's function in controlling the expenditure of Government money.
I am not sure how we in the House can help the Government. I should say that the Select Committee reports on each of the nationalised industries about

once in seven years. That is the way things are going at the moment. This cannot be expected to help the House with information on all investment proposals that cost a lot in certain years. It may be that the House should ask the Select Committee to have a short and quick inquiry immediately after publication of such a useful White Paper as that which we have before us now, and to report to the House on any investment proposal that may arouse anxiety. Meanwhile, the Select Committee would be right to make the fullest inquiry it can of each of the nationalised industries in succession.
As I have said, I agree with the hon. Gentleman that we want a high investment economy, and that we want that high investment to be in the nationalised industries as well as elsewhere. If the Government do not approve the investment proposals of the nationalised industries, no one else can provide the finance for them. It is, therefore, very much in the national interest that we so arrange things that we have high investment in the nationalised industries, and that we can be certain that that money is, to use my right hon. and learned Friend's expression, not misapplied.

5.11 p.m.

Mr. Harold Finch: Although I do not agree with much that has been said by the right hon. Gentleman the Member for Blackpool, North (Sir T. Low), I must confess that we have listened to a very well reasoned speech on the position in the nationalised industries. Any debate on public investment must necessarily be somewhat wide in its scope, and this White Paper contains investment programmes for quite a number of our social services, and for the nationalised industries, all of which are bound to have a profound effect on the nation's economy. As the White Paper itself points out, some of these programmes are inter-related. The rate of investment in one service or industry has an effect on others.
That brings me to the position in the coal-mining industry. That is a basic industry whose administration and setup has a profound effect on the economy generally. The White Paper shows a reduction in the proposed capital expenditure of the National Coal Board from


£108 million in 1959–60 to £100 million in 1960–61, and down to as low as £96 million in 1961–62. Let it be noted that that reduction is made in an industry where a certain amount of capital expenditure is necessary for replacements and for depreciation. The position is all the more serious because in 1960 capital expenditure of £120 million was approved, but, as I say, that is now to be cut down to £100 million.
In addition, we have been reminded that in their announcement about public investment last summer, the Government said that the approved level of total investment in 1961–62 would be held to that of 1960–61. Nevertheless, there is to be a reduction in the capital expenditure of this basic industry. What is the reason for this reduction? Why are we reducing this industry's investment at such a rate? I think that it is due, in the main, to the Government's failure to implement a co-ordinated national fuel policy.
The Minister of Power has acquiesced in and is responsible for this drastic reduction in the industry's productive power. In the three years 1957–59, coal demand fell by 33 million tons. In the three years 1958–60, coal production will have been cut by almost 30 million tons, and manpower will have been cut by well over 120,000 men. The reason for that cut-back has been the continuous growth in oil consumption. It is true that coal consumption has this year gone up by 4 per cent., but oil consumption has gone up by 30 per cent. in one year, and the cuts now proposed in the industry's investment programme will further increase the feeling of insecurity amongst management and men.
Men are leaving the coalfields at a fantastic rate. In 1958, there was a gross loss of manpower of 62,000. In 1959, we lost 73,000 men. In the first forty weeks of this year there was a loss of 77,600 men. These are very serious losses, and they are occurring in the major coalfields. What is far more serious, it is chiefly the younger men and the skilled men who are leaving. In 1959, out of a wastage of 65,000, and excluding those over 65 years of age, 32,000 of the men were under 31 years of age. In the first quarter of 1960, out of a wastage of 30,000, again excluding those over 65 years of age, over 14,000 were under 31 years of age, and the same

trend was seen to be continuing in the second quarter.
There has also been a serious increase in the average age of the men. We are getting a coal industry worked by men between 45 and 65 years of age. That is the position in an industry on which, whatever may be said about oil and atomic energy, the nation still largely depends for its power. We are seeing an exodus of young men who see no future or security in our mining industry due, I repeat, to lack of a fuel policy.
Recruitment, too, is decreasing. In 1956, we could recruit 20,000 men, but in 1959 that had gone down to less than 10,000 and in the first forty-two weeks of this year the recruitment drive gave us only 10,000 men. That is a very serious situation.
To what extent is the industry to be cut back? Where is the cut to stop? Is there to be no limit set on the consumption of oil? Is it to go on and on at the expense of the country's economy? We talk a lot about defence—hours are spent debating that subject—but 80 per cent. of the oil comes from the Middle East and, judging by the way we are travelling, we shall eventually have a country that will depend more and more on oil and less and less upon this valuable home product, coal. We view with great seriousness the way in which this industry is being driven.
The present situation is not the fault of the Coal Board, the men or the management. Let us look at the operational costs. Over the last three years, the Coal Board's operational costs have been reduced by £50 million, due to greater efficiency in the working of the industry. Costs were down by 1s. 9d. a ton in 1959 as compared with 1958, and output per man-shift has gone up by 10 per cent. in the last three years. The fault does not lie with either men or management.
The industry is in a serious financial position because of external circumstances over which the Board, the men and the management have no control at all. Much is said about the last increase in the price of coal, but that is not due to increased costs but to external circumstances over which the industry has no control. I was glad to hear the right hon. Member for Blackpool, North say that economic considerations should


be taken into consideration but not always taken into consideration.
Before I refer to the external circumstances, I wish to draw attention to the Report of the Select Committee on Nationalised Industries which sat in July, 1960, dealing with the British Transport Commission. The Report said:
If decisions are to be taken on grounds of national economy or of social needs then they must be taken by the Minister and submitted by him for the approval of Parliament.
I agree with that.
Furthermore, if Parliament is to specify that certain services should be undertaken despite the fact that the Commission cannot reasonably undertake them, then the additional cost of them should be provided in advance out of public funds.
The Report further states:
…Your Committee wish to recommend the principle that where Government action causes a nationalised industry to incur a specific loss or specific expenditure which it would not otherwise incur, the Government should take steps to compensate the industry.
I agree with that recommendation.
Let us consider the position of the coal mining industry. What are the external circumstances? It was Government decision that led the National Coal Board to sell coal for ten years at less than world prices. As a result, the coal industry was giving a subsidy to the nation equivalent to about £2,000 million. It was Government decision which forced the National Coal Board to carry a loss of £78 million on imported coal. It was Government decision whereby coal mining subsidence was borne entirely by the National Coal Board, the cost of which has now amounted to £24 million. Surely, these are three important features which the Minister of Power should take into account when he considers the serious financial position of the industry.
As against that, there is the stocking of coal, worth £27 million in 1959. Had coal not been stocked there would have been thousands of men unemployed in this country. It was a wise and sensible measure which alleviated the position. It saved men from going on the unemployment register and it thus saved unemployment pay. Surely, this is another factor which should be taken into consideration.

Mr. W. R. Rees-Davies: I have been in agreement with the hon. Gentleman, but would he not agree, following the quotation from the Select Committee, that the principle to which he referred is one which should apply throughout all the nationalised industries and not only the coal industry? Can the House take it that he is expressing the view, not only of himself but also of many of his colleagues, that they accept that that is the right principle as set out in the paragraphs from which he quoted?

Mr. Finch: Of course, I am not fully conversant with all the nationalised industries, but I should say that that would be a wise and sensible step to take in the circumstances.
There are further features of this problem to which I should like to refer. We say that we want a national fuel policy. If the Government cannot assist in one direction, surely they can help in another. We have about 12 dual-firing generating plants. Having regard to the position of this industry, surely it is not unreasonable to ask the Government to convert these dual-firing generating plants to burn coal.

Mr. Rees-Davies: And pay more for the coal?

Mr. Finch: The Government should bear in mind that suggestion, in view of the decrease in the consumption of and demand for coal. As part of our fuel policy we should have some balance and help the coal industry wherever we can. It is already admitted that oil is not cheaper than coal for electricity generating purposes. It was Sir Christopher Hinton who said at a conference:
The Central Electricity Generating Board was thinking in terms of a three-fuel economy—oil, nuclear and coal. In that three-fuel economy oil was going always to occupy only a small position, not because oil sales would not grow nationally but simply because the least attractive way of burning oil was in the large central boiler plants. The ancillary advantages of oil burning were far greater in the smaller industrial unit than in the large plant.

Mr. Nabarro: Will the hon. Gentleman complete his argument and tell the House that on the day following the recent large increase in the price of coal


by the National Coal Board the Federation of British Industries made it known that it would be cheaper to import North American coking coal into the ports of South Wales for use in the plants of the Steel Company of Wales than to use local coal, so high has the price of British coal been driven?

Mr. Finch: With all respect to the hon. Member, I do not accept that. We have heard a lot of prognostications and prophecies about the industry. We were told in 1959 that the stocking of coal would amount to 75 million tons, whereas it is now going down to 48 million tons. The hon. Gentleman is far out. I do not accept some of these statements, whether from the F.B.I. or the hon. Gentleman.
I remind the House that 80 per cent. of our oil comes from the Middle East. I am concerned about this fact particularly from the point of view of defence and emergency. About 90 per cent. of the free world's oil comes from the Middle East, and I am concerned that we are putting all our eggs into one basket. We shall depend more and more upon the Middle East and less upon our own assets.
Once we start closing the pits we shall not get the men to run them again should the necessity arise. In my own county, Monmouthshire, where the major pits are modern and up to date, we are short of 10,000 skilled men. What can be said of Monmouthshire can be said of Glamorganshire. We do not know where to turn for men. Once these pits close down we shall not be able to re-open them in one month or six months.
This is a very serious situation because we are drifting along without a plan and without any fuel policy. Every argument in support of a fuel policy, including the remarks of the right hon. Member for Blackpool, North, should be borne in mind by the Minister. He should come to the assistance of this industry at this important juncture in the history of the coal mining industry which has made such a valuable contribution to this country's economy. I ask the Minister today before it is too late to give us some confidence in this industry so that it can save the country's economy in the years ahead.

5.28 p.m.

Mr. David Webster: I sympathise with the anxiety expressed by the hon. Member for Bedwellty (Mr. Finch) about pit closures. During the summer I had the honour to visit the European Coal and Steel Community. This policy of closing pits is not merely a national policy in this country. In the Borinage region in Belgium there have been extensive closures of the less economic pits where the productivity was about 10 cwt. per man shift. So it is not fair to isolate this problem and say that it is only this country which is carrying out this policy.
Anxiety is also expressed not only in this House but throughout the country at the extent of Government indebtedness and taxation. Both in this House and in the country as a whole we tend to subject ourselves to a fit of schizophrenia when we demand that the Government should enter into new projects by way of social welfare or by way of the extension of the nationalised industries. If I may add to what my right hon. Friend the Member for Blackpool, North (Sir T. Low) said, we should not only have the criterion that earnings should be adequate, but if earnings are not adequate we should define a set purpose for carrying out a particular investment programme.
It may be adequate to say that there is a social purpose in keeping open certain unremunerative pits. That is probably a quite understandable argument. It may be said that there is a social purpose or a transport purpose in keeping traffic off the roads by keeping open certain unremunerative railway lines. Without attempting to gaze into the crystal ball, I think it possible that in the course of the next twelve months or so we shall hear of the closing of unremunerative railway lines, and there will be clamour about that.
In the rural areas the problem is a grave one. In the areas where there are radial lines going into the cities the problem becomes more complex and complicated because, by closing an unremunerative line, more traffic is diverted to an already over-loaded road system, thereby adding to that problem. But the problem is not as simple as that, because in many of these cases it is said that


modernisation of railway lines for commuter traffic would solve the problem. It has been said that in parts of Hampshire there have been increases in revenue and earnings from these lines of the nature of 40 per cent. That sounds a very spectacular figure until we hear that the increase in mileage carried out on these lines is in the nature of more like 140 per cent. In addition, if we are going to modernise both the locomotive and the rolling stock there will be a very considerable capital expenditure which will have to be justified not only as regards earnings but also for social purposes.
There is probably one criterion which may not necessarily commend itself to the Opposition, but I certainly hope that it will commend itself to hon. Members on this side of the House. It is that we should provide by private enterprise a ladder by which people or sections of the country or industries can go ahead and be useful and that we should also by national investment provide a net into which they can fall should disaster overtake them. I think that in all this type of national expenditure and investment there should be a very clear definition that it is either going to produce earning power for the nation or that it has a definite set purpose of a social or amenity value.

Mr. Charles Loughlin: Will the hon. Gentleman develop the ladder and the net point which he has just made so that we may understand it better?

Mr. Webster: I do not know whether the hon. Gentleman wants to climb up the ladder with me or if he wants us both to become entangled in the net, but I will not develop the point further as otherwise I might extend our deliberations unduly.
I want to come back to the burden of the indebtedness in the form of Government bonds and securities because it is so frequently said in connection with the nationalised industries that the nation having willed the end must will the means. We as individuals wish the nation to take on the responsibility and then we come back to this well-worn phrase. But does the nation, in fact, will the means? Does the entire world will the means? We see today the desirability

of undertaking Government indebtedness which has gone to an absolute low. We are seeing War Loan and other Government indebted stock. No one wishes to take on that form of debt. Like the mining problem, it is not a national problem but an international problem on the very largest scale. We see a classical example of it in America at the present time.
There is also the aspect of taxation. We all frequently say in the House that we do not wish voluntary effort to undergo this—that it is a matter for the central Government. The latest instance of that is in the matter of flood relief. Again, that is a Government responsibility. I have only been in the House for three Budgets, but on each of those occasions the Chancellor of the Exchequer has introduced new measures to prevent the continuance of bond washing or dividend stripping. Hon. Members opposite welcomed those measures with considerable glee and the right hon. Member for Huyton (Mr. H. Wilson) had very brilliant and witty remarks to make about them.
But this matter goes considerably further than just the dividend stripper and the hobby farmer. We are also seeing the small tradesman who is no longer willing to submit to the burden of this national indebtedness and taxation. There are plenty of people on both sides of industry who do not work a little longer because if they did it would put them in a higher taxation bracket.
This wishing to increase the national indebtedness and national obligation by undertaking things that frequently the individual or private enterprise should undertake is becoming a national malaise. We have seen examples of it in other countries and I think that we should more rapidly learn that lesson and curtail our activities in that direction before they bring us to disastrous results.

5.34 p.m.

Mr. Norman Pentland: I hope that the hon. Member for Weston-super-Mare (Mr. Webster) will forgive me if I do not follow him in the wider aspects of the remarks which he has just addressed to the House. I wish to draw attention to some simple facts of the economic position, regarding how our people view the position today and,


particularly, in relation to the Chancellor's speech this afternoon, not so much because of what the right hon. Gentleman said but because of what he left out and left to the imagination of hon. Members on both sides of the House.
I think it true to say that whenever the economic situation is debated in this Chamber we invariably find among speeches made by hon. Members opposite and also in the daily Press an emphasis laid upon the fact that the greatest dangers to our economy can come from the demand of trade unions for increased wages for their members. Also drawn to our attention are the harmful effects to our economic situation created by irresponsible action, or supposedly irresponsible action, taken by certain workers to industry today.
I think it is true to say that most of us deplore unofficial strikes. I have worked long enough in industry to know that the workers of the country do not strike unless they have a very real grievance. They do not lightly strike. I for one refute the popular assumption that unofficial strikes are, in the main, caused by irresponsible shop stewards and trade union leaders who are supposed to be out of touch with their membership. I refute that assumption at once. Indeed, I have far more faith in the integrity and the intelligence of the British workman to believe that the simple fact is that far too many workers in industry today are not having it so good and because far too many peaple are seeing that the position remains that way.
As far as I can see, the present Government are doing nothing at all to bring about a solution of this situation. Indeed, they are doing quite the reverse. I believe that one of the most pointed charges that could be made against the Government, and which could have been made and indeed was made about Tory Governments in the past, is over their economic policy since 1951. I know that this has been said on many occasions, but that is no reason why I should not say it again today. They have deliberately encouraged a free-for-all. That is the whole of their philosophy and that is the line which they have been taking all along.
I understood from last Sunday's Press that this week the Chancellor of the Exchequer was to make a big appeal for

a go-slow in wage demands. We have heard that today. He will have to do a lot better than that, and there will have to be a drastic change in the way the Government are conducting our economic affairs before the trade union movement will even consider such an appeal. Do the Government think that they can encourage a free-for-all in profits and dividends and, at the same time, not have a free for all in wages? If they continue as they are doing to impose restraint unfairly upon the workers, the inevitable result will be that they will provoke wage claims and push them to the point when strike action occurs.
It is quite true—this has been levelled at us time and time again from the benches opposite—that the workers of the country accepted a measure of wage restraint during the period of the Labour Government. But the situation at that time for industrial workers was entirely different from the situation which exists now under this Government. The trade unions then had evidence satisfying them that, when they worked together with the Labour Government, they could be quite happy to think that the Labour Government, when economic difficulties were encountered, would work out and apply a plan which made equal demands and offered equal opportunities to all sections of the community. This is not the situation today, and in the difference lies one of the real causes of unrest in industry.
Every worker is now fully aware that the rise in profits and dividends has jumped again this year and is steeper now than ever before, and he knows that dividends are outpacing wages and salaries faster than at any time since the end of the last war. In fact, dividends are now rising more than four times faster than wage earnings in industry. Is it any wonder that there is unrest among the workers? We have had a credit squeeze. We have had a 6 per cent. Bank Rate. At one time it was 7 per cent. The previous Chancellor appealed for a lowering of prices or for stability in prices. The Prime Minister has appealed for more exports in order to avoid an autumn financial crisis. We have had all that, but those appeals have not been accepted at all by the people to whom they were directed, and profits


and dividends move merrily on their way.
This extraordinary shift in our national wealth for the benefit of shareholders and profits and away from wages and salaries has been gathering force for nearly three years. I shall not weary the House by going into all the figures; they are readily accessible and the matter can be easily proved. As I have said, dividends are now rising over four times as fast as wage earnings. Does anyone really seriously believe that the workers are not fully aware of these facts? In my opinion, they are at the root of the unrest in industry. I assure the House that every industrial worker, through his trade union and the knowledge which is passed on to him, is fully aware of them.
The Chancellor of the Exchequer spoke about the rise in dividends and said that one was entitled to expect them to increase having regard to their level in the pre-war period. The Daily Express in its leading article of 24th March this year had something to say about this.
Bad news from the wages front."—
said the Daily Express—I am quoting certain passages from it—
Bad news for those who have the healthy development of British industry at heart. Wage increases are lagging behind the rise in company dividends. Wages have gone up 42 per cent. since 1952. In the same time dividends have increased 78 per cent. This comparison is discouraging. And it is not a good answer to say"—
this is the answer to the Chancellor of the Exchequer from the Daily Express—
that from 1938 to 1952 wages increased at five times the pace of dividends. So they should have done, for in 1938 Britain was still suffering from a dreadful depression. Wage rates were only catching up. The principle should be clear and imperative. Dividends and wages should march together. There should never be a situation in which dividends move ahead of wages. Both should share alike in the benefits of a prosperous national economy.
That is not the Daily Worker, the Daily Herald or any Left wing paper speaking. It was said in the leading article of the Daily Express of 24th March, and I think it very well sums up the situation in industry today. Apparently, the Government do not take that view. They have made their appeals, but they know as well as we do that those appeals have met a very bleak response from the people at whom they were directed.
My hon. Friend the Member for Gloucester (Mr. Diamond), who is unable to be here today, made a very pointed reference to this matter in the Budget debate on 5th April last. Referring to what the Chancellor had failed to mention in his Budget speech, he said:
It is my job to encourage him to put a little more accent, as it were, where encouragement is needed, and I invite the right hon. Gentleman in his important capacity to say to the nation, 'Thank you, workers, for having contributed to the stability of prices over the past year ', and to all his friends who are responsible as directors for dividend policy 'I regret that you, directors, have not come up to the standard of the workers in their sense of patriotism'."—[OFFICIAL REPORT, 5th April, 1960; Vol. 621, c. 247.]
Those were very wise words from my hon. Friend. They apply to the present situation. Of course, his invitation was not taken by the previous Chancellor of the Exchequer.
We have a free for all more intense than ever, and we may as well face the fact that profiteers and Stock Exchange manipulators are getting away with murder at the present time. Everyone in the House realises that perfectly well. I sincerely believe that the trade union movement—we should remember this when we speak about the responsibilities of the trade union movement in Britain—has been very meek and mild in pressing the claims of its members throughout the whole of 1960.
Some people may claim, as the Chancellor has claimed today, that because the rise in living costs has been halted—we all know that this is due to lower world prices—the trade unions are not justified in submitting further claims now. My reply to that is that high living costs are not the only justification for increased wages and salaries. Rising dividends are another. The sooner the Government recognise that and do something about it, the better for everyone in the country, as I am sure everyone concerned about the present economic situation will agree.
I turn now to the lack of provision for the relief of local unemployment. We have always recognised that the changing pattern of industry is, in turn, changing the face of Britain. There is a striking example of that in the cotton and coalmining industries. My hon. Friend the Member for Bedwellty (Mr. Finch) has just spoken about the coal


industry. I want to refer to it myself, but for another reason—I know more about coal than I know about cotton.
I know also that the situation in mining areas has been described many times before, but whenever we have the opportunity, it is our duty to hammer home to the Government the facts of life as they are taking place in the mining areas of Durham, Scotland and South Wales.
The coal industry is an extractive industry. It is inevitable that the reserves of coal in certain older coalfields will peter out and become exhausted. We now know well in advance almost the exact time at which pits have to close. When pits in Durham, Scotland and South Wales close down, as many will within the next ten years, the situation will become desperate. Almost all the population—the young and middle-aged—now have to rely almost entirely for their livelihood upon the working of a colliery.
If these communities are not to become derelict areas, the Government must provide work when pits close. That is our claim. I do not say that another industry could be started in every mining village. That is unnecessary in modern times. There are better roads. If there are not better roads, there should be. They could be built up. In most mining areas of Durham there are better travel facilities for getting people to and from work. The Government must provide a positive plan to meet the situation and save these areas.
It would be a tragedy if the nation lost the capital assets in the mining areas, which collectively must run into millions of pounds in housing and social services alone. They must not be lost. We say that there should be a plan which would use our industrial potential in such a way that we would be able to use the social resources in housing, and so forth, and take work to the people, thereby preventing thousands of them moving to other areas in search of jobs.
My hon. Friend the Member for Bedwellty mentioned the alarming manpower problem already existing in the coalmining industry. It will continue in the future. One of the main reasons why young men are leaving the coal-mining industry is that they can find no security in it.
Earlier this year I asked the Minister of Defence how many young men between the ages of 18 and 25 whose previous occupation had been in the coalmining industry had joined Her Majesty's Forces from 1957 to the latest available date in 1960. The figures published in the OFFICIAL REPORT showed that in that period, which I think was up to February of this year, almost 10,000 young men between those ages had left the coalmining industry for the Forces alone. Thousands of pounds had been spent on training those young men so that they could become efficient miners in the future. They have left the industry because of the paucity of the Government's present policy. We shall have more to say about that when a debate on the coalmining industry takes place in the future.
I have said repeatedly in the House that the Local Employment Act has only scratched at the surface of the problems in Durham. Our problems are now more serious than ever, and become alarming if one is concerned about the future, as I am today.
The present position is serious, but it will become more serous in ten or twenty years time if a positive plan is not forthcoming for Durham. Earlier this year—the position is not much better today—there were 24,500 unemployed in the geographical county. There were 2,500 unfilled vacancies. Therefore, there were nearly ten persons unemployed for each vacancy notified to the labour exchanges. This compares with a ratio of well under two to one for the country as a whole. Perhaps more significantly, there were sixteen men unemployed for each adult male vacancy, compared with a national ratio of only three to one. It will therefore be recognised that even the present situation in Durham is gloomy.
Looking to the future, as we are entitled to do, it seems that there will be a very real crisis ahead. The memories of people living in Durham are not by any means short. They have very long memories. Worse still, the young people in Durham are becoming very frustrated and embittered about their prospects, so much so that they are leaving the county. Numerous school leavers still cannot find a job. It is no wonder that thousands of people migrate from


Durham every year, and the same applies to Scotland and South Wales.
The present situation demands that the Government take urgent, vigorous and co-ordinated action. When direction of industry is mentioned, the invariable reply is that that would mean direction of labour. Direction of labour is already taking place in Durham, Scotland and South Wales, as we all know. Because of the economic situation in those areas thousands of people are being forced to leave. The prospects of finding a job in those areas are hopeless.
I have repeatedly asked for industries to be sent to Durham which could work in harmony and co-operate with the basic industries there, preferably coal. I make a suggestion to the Government now which they will probably not accept. One of the solutions to this problem is that they should assist nationalised industries to build subsidiary companies. There is no reason why they should not. Nationalised industries spend millions of pounds on materials and equipment. Why should not subsidiary firms be built by nationalised industries, assisted by the Government, in development areas or where the Local Employment Act is expected to operate?
Durham needs more light industry, but, more than anything else, it needs heavy industries to meet the demands which will be made upon it in the future. I therefore hope that the Government will give serious consideration to the position of the people of Dunham, Scotland and South Wales. I hope that they will take urgent action to relieve the fears and anxieties which our people have about the future.

6.0 p.m.

Mr. W. R. Rees-Davies: The first part of the speech of the hon. Member for Chester-le-Street (Mr. Pentland) was what I call a "cake" speech; it dealt with the question of how we should divide the shares of the national cake. I want to say something about that this afternoon, but it would have been a great help if we could have had some nice, fat dividends from the nationalised industries. Then there would have been a great deal more of the cake to share.
On the latter part of the hon. Gentleman's speech, that dealing with the local

employment situation, of course I have sympathy with him. It may surprise him to know that my constituency probably has a very much higher percentage of unemployment than any constituency in this country. One has to go to Northern Ireland to find something to exceed it. We are quite satisfied that the recent Local Employment Act has been of such effect as to create, and bring in rapidly, new industries for the area, so much so that I raised no objection to the President of the Board of Trade when last week he took the Margate area off the Local Employment Act list of applications for financial help.

Mr. Frederick Willey: rose—

Mr. Rees-Davies: I do not want to give way now. I am going to build a speech of my own and I do not want to get involved with what is a pure byproduct on this particular point. I wish to assure the hon. Member for Chesterle-Street that I should certainly be delighted to assist him in any way I can if he ever finds he has unemployment difficulties in Dunham. I am quite sure that the Board of Trade will be able to assist him in that regard.
The real purpose of this debate, as I apprehend it, is to consider the question of public investment in Great Britain. The most astonishing feature of the White Paper is that it does not go into, nor purport to go into a discussion of the proper field for public investment in Great Britain. We start with the stated fact that we have coal, gas, electricity, the Post Office, education, housing, water, sewerage and so on, as being the different industries, services and facilities which receive public investment, but the most important question of our age, economically, in my opinion, is what is the true field for the public investment?
For example, the Government have recently made an advance loan to Cunard. There is the question, also, of the steel industry. It is a very important matter, in the light of what is going on in other countries, for us to consider the true and proper field of public investment. Then we should consider the next, also most important, question of whether this House has any control over public investment, any control over the field of public investment and any control over


the principles or purpose which lie behind it.
I have recently returned from America where it is perfectly apparent that this country could become an infinitely more important tourist country than it has ever been. I have absolutely no doubt at all that the first export industry of this country could be tourism. At the moment it is said that the motor industry and others need support, but we could bring in upwards of 1 million or more tourists in the next two or three years. I shall not go into this in detail because it does not touch on the point about public investment, but I hope the House will accept this and later I shall prove that it is so.
At the moment we have not the hotels and accommodation to hold those tourists and the whole propaganda is completely distorted because of the absence of that accommodation. If we provide sums of money for Cunard to build ships, why should we not provide loans for hotels in this country to enable them to provide accommodation from which we would get a very great return? If the Government were to advance loans at fixed interest rates of, say, 4½ per cent. over a loan period of forty-four or forty-five years, I think it likely that we would get the hotels that modernisation needed in this country. We would definitely get a very large amount from tourists which would give us an increase in our dollar earnings.
I am merely posing this question. I am not answering it nor saying whether it is right for the Government to do so or not. I am posing the question of what is public investment and what is its rôle. Is it not time that we should consider, first, whether it should be extended to hotels or to museums and galleries? Are we to take it away from museums and galleries and run them like the Americans do, as private enterprise organisations? Let us have an opportunity, first, to consider the field of public investment. Is it too wide or too narrow?

Mr. Ernest Popplewell: I appreciate the observations of the hon. Member about the tourist industry, which I think can be a very useful venue, but I was wondering when he spoke of investment in hotels whether he would agree that the public

sector, the British Transport Commission, should also be allowed to build new hotels with a view to attracting tourists. I had in mind particularly the very little accommodation there is in the North-East. There, owing to the machinations of the Government, the British Transport Commission is not allowed to develop hotel accommodation in the way it wishes. Would the hon. Member include the publicly-owned accommodation for this purpose?

Mr. Rees-Davies: The hon. Member who has intervened is a wizard. He has intervened on precisely the subject to which I was about to turn and I can promise him a complete reply. The reasons why I opened this topic was that no one on the Front Bench, or anywhere, has asked us to consider what is the true field for public investment. I have started deliberately in the camp of hon. Members opposite by saying that there is a field where there should be wider public investment, possibly in shipping, in steel, and coal, and also possibly in tourism. These may be matters in which it could be widened. Broadly speaking, I would expect the party opposite to be with me on that, but I should expect hon. Members on this side of the House to be against me.

Mr. Nabarro: I am certainly against my hon. Friend.

Mr. Rees-Davies: I shall be very interested to hear in the course of the debate what my hon. Friend thinks about the Cunard loan and things of that kind, whether he thinks it is right and whether the Tories are in difficulty on their own philosophy. I do not think so.
Now I want to turn to the other side of the picture. Equally, I think that in a great many fields where there has been public investment it is time we looked at it to see to what extent it should be narrowed. My approach is purely practical and pragmatic. I am taking one industry, the one I know best, the British Transport Commission and the industry which is dependent upon it. I am quite satisfied, having read the whole of the evidence of the Select Committee and the recommendations, that the following steps are absolutely essential for this industry. I believe that the railways


ought to pursue rail operation and rail management alone. They should not be concerned with the industries which are associated with them and of which they are not really a part.
I hope that the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) will pay attention to these matters because now I am dealing with the point which he has raised. It seems to me essential that we should ensure that the railways can get ahead with rail operations and, if they are to do that, the first thing which is vital is that the whole of the land and property and assets of the railways in the British Transport Commission should be hived off into a separate railway property development corporation. The men who entered that industry would then have the opportunity of entering either as railwaymen or as property men to be trained in one or other, part of the industry.
The second stage is that the hotels of the railways and the whole of their catering establishments should gradually be divested by them in time. So far as catering is concerned, the whole of the catering at not only the main line stations but at the rest of the stations in the country should be sold entirely. In the case of the main line stations it should be sold off or concessioned off—I will explain that—to people like Lyons, Fortes and others. In the case of the local stations it should clearly go to the local caterers. So far as advertising on the railways is concerned, which has been particularly barren for a great many years, that would be far better dealt with by concession.
I want to explain why I say this. I think that perhaps the most dismal sight is the way in which main line stations in this country have not been developed to the slightest degree. I would ask hon. Gentlemen opposite to consider—shall we say?—the Rockefeller Center in New York, or the new developments by Mr. Cotton taking place at Grand Central, and then I would suppose they will recognise that the Americans have at least one thing in which they have an advantage over us, and that is the effective and economic use of space.
The really tragic failure of the entire railways to appreciate the immense amount of space which they have has

led them to fail to appreciate what we could do at places like Victoria Station or King's Cross. By way of example, at Victoria Station we could have put up with the greatest of ease a hotel to take a thousand passengers on occasion, and built up seven or eight storeys high to have provided all of the offices necessary for those who make use of that station. We could have put underneath four or five major restaurants, from first class down to the cheapest ones, which would have given us the whole of the catering services we required. We could quite easily have sold off for many thousands of pounds the porterage rights at that station and we could have concessioned off all the lavatories and cloakrooms to those who would charge for them and make a profit. In that way we should have a completely different outlook.
I am not—let me say it straight away—against those nationalised. I am not against public investment. What I am in favour of is that all sorts of people who spend their lives in particular studies should be the people who should be given the opportunity to carry them out to best advantage. Quite frankly, whatever hon. Gentlemen like to say to me, Mr. Cotton and Mr. Clore, as a result of their studies of the operation of large capital finance in the United States and in this country, know that unless we have very considerable capital today which we can spend on these different projects we shall not be able to succeed.
It is my belief that Messrs. Fortes, Lyons and the like can provide a far better service to the community by taking over the catering service. It is my belief that the hotelier born and brought up in that business will make a much better success of the hotels, and a far greater profit than that made from them by British Railways. When I talked about this to Sir Brian Robertson, who very kindly invited me to dinner to discuss the Commission, he said, "Please do not take away from us our hotels, because we are making a profit." I said, "Sir Brian, I can appreciate you are making a profit, but how much greater profit would be made, if I may say so, by hoteliers like Mr. Conrad Hilton."
Take for example places like Manchester, Birmingham, Liverpool. Do hon. Members realise that the railway station is the greatest industrial land asset of


those cities? It is so in Nottingham. Not till we realise that all that land is worth £10,000 an acre or more, or something of that sort, shall we make the full economic use of those land assets, and then we shall succeed.
This is not a plea for the Cottons and Clores of this world to take over all the railways, but it is a plea that there should be an entirely separate corporation of British Railways which should be responsible for running the property and land assets side, and that it should be as far away as possible from the gentlemen running the railways, and have no connection with them. [Interruption.] I do not want to give way for the moment. I do not want to take too long, and this is a long subject.
The next point I want to make is about the inland waterways. British Railways are willing to sell them because they have made a loss. Clearly they should be sold. They must be sold off. I think we should soon find managers for them who would soon find a valuable way of making use of the canals and all that great system.
In addition, there is shipping. The plea is, "Please do not take away our shipping, our cross-Channel steamers make a profit." They do, but I believe that they would be better run by people like British Steam Navigation and others. I sincerely believe that. If they can show they are as efficient and as successful as private enterprise would be I would be the first to admit it and I should be delighted to admit it, and I would leave them alone, but what I am saying is that we are in a world of competitive co-existence, and all I ask for in the field of competitive co-existence is that they should be prepared to say, "We can show a good face and prove as good a success as private industry". If they can show that it is better under public ownership they should be under public ownership. Then I am for public ownership. If it is not, I am not.
When we have taken away the catering services, the advertising services, the hotel services and put them into a corporation, the corporation will then be able to discover which it is best it should sell, which it is best it should itself develop, and sell on long leases or short leases, and which it decides that it should ultimately retain. Marshalling

yards are particularly difficult. In some cases they can clearly sell, and in some cases they can make a good profit by selling them as industrial sites. In some cases the railways may say that they may need this land for future development. I am content that the decision should be left with them, but I believe that the person to make the decision as between the property side, the inland waterways, the questions of new public investment in that industry, must be to the Minister.
In conclusion on this, I would say that there should be a sub-committee of the Select Committee on Nationalised Industries on each particular industry. If there is some gigantic scheme coming forward—and I am not talking about £500,000 or £1 million but one running into several millions—the Minister might refer the matter to the Select Committee set up by the House, that is, the Select Committee on Nationalised Industries, or whatever it may be. The plea which I am making in respect of the British Transport Commission applies, and the principles apply, to other industries.
In conclusion I would say this. The hon. Member for Bedwellty (Mr. Finch) drew attention in dealing with the coal mining industry to what should be proper subsidies. I agree. If subsidy there is to be for social purposes then the Government should pay it in advance and it should be clearly pinpointed. I agree with this position entirely, but I want to say that when we get down to railway management and railway operation we shall find they still cannot make a profit with the existing structure. All the Victoriana must go, and we must be ruthless to see that these branch lines are all cut out.
We must also stop those ridiculous lengths of ordinary stations. There is great wastage of land at either end of a station. I wonder how many Members of this House or how many people in the Galleries have ever walked the full length of their local station and realised how much wastage there is? I say we should cut this out. If it is, what is to happen? The answer is that the passengers must be brought by road, and in the provision of roads, supposing the service is to be run by anybody who will tender for that service, the answer to that is that if there is no tender, no local tender, the local authority will take it


over, and the Government must then, of course, make a grant as a social subsidy to meet that need. In that way we shall be able to bring the railways to what is necessary for them today.
If there is one question I can pose with confidence it is this. If we were building a railway system in Great Britain today, would we have the lines or the stations where they are at the moment, would we put them just where they are, would we have stations of such length and in the districts where they are? On the other hand, I would agree with the hon. Member for Caithness and Sutherland (Sir D. Robertson)—perhaps I ought not to refer to him because he is sitting below the Gangway—that we do not want to depopulate that part of the world and draw people away without providing them with adequate transport assistance.
Then there are the lines open to the Hebrides. The situation of the McBrayne line is really farcical. It would be infinitely cheaper to use air travel than other methods. Just recently I came back to Manston on a trooping contract flight from Germany done by Silver City Airways instead of by railway and by sea. It is faster, it is more direct, it is much cheaper and in every way it is better.
I make this plea now to the House. I am not being discourteous to hon. Members opposite. We on this side of the House are told that we never criticise the Government and hon. Members opposite are told that there is no opposition coming from them. We are told that we never criticise the Government, with the exception of my hon. Friend the Member for Kidderminster (Mr. Nabarro) who apparently for some reason is called "a clown", a view from which I dissent most sharply.
We are told that we never criticise and hon. Members opposite are told that they are not an effective Opposition. Therefore nobody loves us politicians very much today, but they might love us a little more if they recognised that we are all trying to look to the future and if hon. Members opposite forgot a little of their Socialism and we on this side forgot that public investment must necessarily be wrong. We must recognise that there may be faults on both sides as we go into the future.
The test in each industry must be solely which is the most efficient method, who has the most up-to-date outlook and who are the best men to put in power. And let us see that the man who gets the job gets on with the job. Do not let us continue giving Sir Brian Robertson and his assistants the unenviable and completely impossible task of trying to run seven or eight industries in one gigantic incubus with no method of accountancy at all.

Mr. Popplewell: Nonsense.

Mr. Rees-Davies: You should recall that my hon. Friend the Member for Yeovil (Mr. Peyton) asked in an important Committee upstairs questions of the British Transport Commission about their last valuation.

Mr. Speaker: Order. The hon. Member must address his observations to the Chair.

Mr. Rees-Davies: I am sorry, Mr. Speaker.
The hon. Member for Newcastle-upon-Tyne, West will recall that my hon. Friend the Member for Yeovil was posing to an all-important Committee the question whether there had been a valuation of the Commission's assets. He was told that there had not been, and that the assessment was from 1820 to 1947. The Commission was told that these figures were antiquated and archaeological, and the British Transport Commission replied, "Yes, there is a great deal of archaeology in British Railways."

Mr. Popplewell: The hon. Member has made a serious statement in saying that there is no accountancy on the railways, but he boasted earlier that he had read the full evidence placed before the Select Committee on Nationalised Industries. Appendix 39 of the Report of that Committee goes very fully into the whole question of accountancy. The question of valuation is a rather different problem. It is the question of getting an up-to-date valuation of property now, compared with a valuation when the railways were taken over, but Appendix 39 goes very fully into the difficulties of railway accountancy.

Mr. Rees-Davies: It goes into the difficulties all right, but the conclusion was and the fact is that there is no system


of national accountancy at all, and even no full regional accountancy. As a result British Railways are unable to give an estimate in advance, or any result later, indicating profit or loss in respect of each of the facilities of the undertaking, with the exception of such collaterals as hotels and catering.

Mr. Popplewell: The hon. Member is quite wrong.

Mr. Rees-Davies: It is all clearly set out in those conclusions. I believe that we have come to a day and age in which we must look at what properly are the fields for public investment. I make a strong plea that, whatever Sir Ivan Stedeford may say about these matters, it is plain beyond peradventure that we need a considerable change in the structure and organisation of British Railways, that we must give railwaymen a chance to run the railways, and that we must try to reduce the remainder of the overall position into effective units which then would be able to make a profit. The result would be that instead of next year having to carry £90 million on the Tobacco Duty as we did this year we shall not have to carry that sum or indeed any sum of money at all.

6.25 p.m.

Mr. James Dempsey: I will not follow the remarks of the hon. Member for the Isle of Thanet (Mr. Rees-Davies) into the realm of dismantling the cafeterias of British Railways in an attempt to find a solution to the basic problems of our economy. The issue before the House is much more fundamental than that of dealing with some aspects to which reference has already been made in the debate. It is time that we considered the terms of the Opposition Amendment. which reads:
but regrets that the investment programme makes no adequate provision for the expansion of the economy, the relief of local unemployment or the improvement of social services.

Mr. Speaker: I do not think that that Amendment has yet been called. No doubt the hon. Member will bear that in mind.

Mr. Dempsey: Yes, Mr. Speaker.
I had hoped to hear from the Front Bench opposite just what economic progress

we are making under the Tory Government. I was anxious to ascertain how we were progressing in productivity and to hear about our achievements in exports, but so far we have not had this information. I recollect that only the other evening my right hon. Friend the Secretary of State for Scotland—

Mr. A. C. Manuel: Right hon. Friend?

Mr. Dempsey: Yes.

Mr. Manuel: That must be the first such reference for a long time.

Mr. Dempsey: I recollect the Secretary of State reminding the Opposition that we on this side of the House had forgotten about his educational record in Scotland, but I wondered whether we should not have a look first at his own Government's economic record within and outwith the country before we proceeded to discuss Scottish aspects of their economic policy.
The two aspects from which we can gauge the success of the Government's economic policy are productivity and exports. The Government's White Paper on Public investment states that capital investment by all public authorities will be kept at the same level as last year. This statement is made despite the fact that the national income is now higher and that therefore eventually we shall have a smaller proportion of that national income in public investment than we have had in the past.

Mr. E. G. Willis: That is very important for Scotland.

Mr. Dempsey: I shall deal with Scotland later in my remarks.
It is for the reason that the national income is higher but the public investment is to remain the same that the report by Political and Economic Planning arrives at the following interesting conclusion:
The rate of growth of production and of productivity in the United Kingdom has been much lower since the Second World War than in many other countries, and a continuation of this poor economic performance would leave Britain with a lower standard of living than several other European countries within a few years.
These conclusions have been arrived at by a committee of impartial economic experts—not by a committee from the


Opposition, nor by a sub-committee of the British Labour Movement.
If we further examine the Tory Government's record and compare our industrial output with that of other countries, it makes extremely interesting reading. Taking 1950 as representing 100, and studying the league table, we find that since 1951 the following rates of progress have been achieved: West Germany, 211; Italy, 181; France, 165; Holland, 143; Belgium, 124; United Kingdom, 121; and U.S.A., 119. In that table, which shows the extent of our industrial output, we are second from the bottom of the league. We are in danger of relegation.
If we proceed to examine the situation as it develops and look at the next aspect of this great economic problem—the total capital investment in the country—and make a comparison with other countries we find that a deplorably low rate of capital investment is being pursued by the Government. By taking the amount as a percentage of 1957 income, the following very interesting information is revealed: Norway, 27 per cent.; Holland, 25 per cent.; West Germany, 22 per cent.; Italy, 22 per cent.; Sweden, 20 per cent.; France, 18 per cent.; U.S.A., 17 per cent.; Belgium, 16 per cent.; and the United Kingdom, 15 per cent.
We are actually at the bottom of this league table. It is an insult to the intelligence of not only the Opposition, but all responsible and thinking people in the country for the Government to ask us to accept their White Paper as a manifestation of an economic policy for the nation.
As we examine the situation further, we ask ourselves how our investment and rate of output are reflected in the output per man-hour compared with other nations in West Europe. Between 1953 and 1957 our increase in output per man-hour was 10 per cent., whereas in France it was 22 per cent., West Germany, 26 per cent., and Italy, 29 per cent. Frankly, if these illuminating figures do not reveal stagnation, then I do not know what they really mean. I am at a loss to understand how hon. Gentlemen opposite are not alarmed about the deteriorating situation in our economy.
Hon. Gentlemen opposite have only one remedy when we find ourselves, as

a result of such stagnation, in crisis after crisis, and that is credit control, hire-purchase restrictions, a dearer Bank Rate, slashing of public enterprise schemes and social services—indeed, everything but the only logical solution, which is the planning of the economic development of our resources, covering both the public sector and the private sector of industry, consumer demand and exports. Only commonsense plans for integrating all these prerequisites upon which a sound economy is based can solve the problem.
I heard the hon. Member for Kidderminster (Mr. Nabarro) talking about motor cars. Even in that sphere we are not making much progress compared with other countries. In 1954, the United Kingdom exported 374,000 cars and, in 1959, 550,000, an increase of 47 per cent. But West Germany, in 1954, exported 247,000 cars and, in 1959, 720,000, an increase of 191 per cent. Here, we have an indication of the stagnation in even our motor car industry. This is also manifested by the news this evening about redundancy at Coventry and the reduction to three days a week work in one of our major motor car factories.
It is because of that and other reasons that no one can accept the existing situation and that the Opposition are trying to stir the Government—if not the Government, then the British people—to a realisation of the serious economic situation into which the nation is drifting. The Government's present policy leads to paralytical complacency, and there must be a reversal of this policy if the country is to be rescued from its declining influence in the world market.
I now want to deal with another aspect of the economic problem which affects Scotland very greatly, and that is the question of Scottish unemployment. I do not know how it is possible to talk about expanding the nation's economy, about our ability to produce wealth and about increasing the standard of living when we keep 65,000 people out of work. It seems to me to be a contradiction in terms.
Recent figures show that there are 65,225 people unemployed, of whom 47,916 are male. One gets rather disconsolate listening to the right hon. and learned Gentleman telling us about the


new factories and new jobs that are coming to Paisley and Bathgate. We are never told how many extra jobs are coming, and that is what is important. We want to know about the extra jobs which will help to occupy our 65,000 people who are unemployed.
Scotland has the highest regional total of unemployment in the United Kingdom. The Secretary of State for Scotland is partly responsible for this. As the custodian of Scottish interests, he should do more in the way of consulting his right hon. Friends to ensure that we have the necessary employment opportunities. In north Lanarkshire, of which my constituency forms the main bulk, we have approximately 2,000 people out of work and, in addition, five basic industries are running out.
I regularly ask myself where the new Local Employment Act is and what it is doing to remedy this regrettable situation. I thought that it was the answer to the maiden's prayer. However, unemployment totals are mounting, and all I can learn about the operation of that Act is that two firms in my constituency applied for financial assistance and were turned down. That is how the Act is operating in an area which has a very high rate of unemployment. Surely, therefore, this debate must pay great attention to this serious problem, because in Scotland in general it would have been worse but for the fact that we have what is known in the North as migration.
It is interesting to study the figures of migration. In 1957, 32,000 people left Scotland; in 1958, the figure was 16,000; in 1959, it was 21,500. That represents an overall insurable population of 11,000 workers leaving every year. It is true that some leave to seek pastures anew, and that some move to make progress, but a great many have no alternative but to move because of unemployment. We hear in this House and outside it that we should not apply the powers of physical compulsion to employers, but here we see the powers of economic compulsion being applied to the workers of Scotland. They are compelled to travel to the South and to other parts of the world to find work.
I also draw the attention of the Secretary of State to the serious problem of juvenile employment. This aspect is

often overlooked to a great extent. In 1959, there were 62,000 school leavers in Scotland. According to the current figures, 3,914 juveniles are still looking for employment. They are on the juvenile register. By 1962, 81,000 young people will leave school—19,000 more than is normal. If we are still looking for employment in 1960 for 3,914 on the juvenile register—that is according to the current Ministry of Labour Gazette—where are the plans to employ an additional 19,000 in 1962? What are the Government doing about that? Have these youngsters to join the endless queues for employment at the employment exchanges? Is that not stagnating the nation's economy?
In my county the director of education has stated in writing that it is not unreasonable to deduce that in 1962 about 5,000 boys and girls will leave school and in all probability run about the streets idle. Surely the Government must prepare, adopt, and launch plans immediately in order to rescue the cream of the present generation, the citizens of tomorrow, from the possible humiliation of unemployment for years to come.
It is not unreasonable that we should apply ourselves to the problem of improving the social services. The Government's housing record is deplorable. In 1953, local authorities in Scotland built 29,719 houses; in 1959, they built only 18,665. That is a shocking record for any Government in charge of the affairs of the Scottish people, especially bearing in mind that we have 71,784 one-apartment houses, and 619,521 two-apartment houses without even a bath. Scotland is part of the United Kingdom and needs houses more so than some of the other parts of the United Kingdom.
According to figures supplied by the Secretary of State himself, of the 231 housing authorities in Scotland, 116—or 50 per cent.—were not building any houses and had none under construction in May of this year. That is one of the most deplorable records any Government can have. It is not unreasonable to charge the Government with the wilful neglect of the interests of the Scottish people.
I could tell more of this record of the Government, but other hon. Members wish to speak. However, having mentioned the schools problem, I will also


refer to the fact that in Lanarkshire, two weeks ago, the education authority met the local Members of Parliament and stated that the Secretary of State's Department had agreed with its estimate of schooling requirements for the next five years, but, because the calculation of the Government grant will mean a rate burden of £490,000, or an increase of 2s. in the £ in the rates for school building alone, the authority is compelled to depart from the programme.
The director of education and his committee have made it clear that in view of the financial policy of the Secretary of State's Department the programme is to be scaled down by £2 million over the next five years. It is absolutely disgraceful that our children should be treated in such a parsimonious fashion by this Tory Government.
I shall not develop the question of hospitals—we still have not any. Roads are another important social service, but it is well established that grants to Lanarkshire County Council for classified roads have been reduced progressively over the past three years, and that the overall grant for Scotland has also been reduced. All these facts are recorded in the debates in the Scottish Grand Committee, and I shall not weary the House by repeating them tonight.

Mr. Willis: According to the White Paper we are discussing, there is to be a still further reduction of the roads programme which has been announced for next year.

Mr. Dempsey: That is indicative of the treatment that the people of Scotland are receiving at the hands of the Government and their Ministers for Scotland. I say sincerely to the Secretary of State that the time has arrived for deeds and not words. Deeds are always more effective. If private enterprise is unwilling to provide employment in Scotland then it is his duty to see that public enterprise comes to Scotland with a view to solving the problem of unemployment.
Why, for example, should we not have the manufacturing jobs for the modernisation of the railways such as electrification manufacture and the components production of all the other parts necessary for the modernisation of the existing services? Why should not Scotland have its

full share of the production of such goods? It was the right hon. Gentleman himself who said, about industries,
I do not care a hoot whether they are nationalised or not if they are contributing to the well-being of Scotland.
I urge the right hon. Gentleman to act on that statement. Let us have the industries and services which are badly needed, and let us see in our lifetime that Scotlands' economy, in concert with the economy of the rest of the United Kingdom, ceases to stagnate, develops and expands, and overtakes our rivals on the Continent to lay the foundations for the better Britain for which we all strive.

6.50 p.m.

Mr. Gerald Nabarro: At the outset, I want most warmly to congratulate my right hon. and learned Friend upon his maiden speech in the House as Chancellor of the Exchequer. I hope that he will translate to this senior ministerial appointment all the lustre and success which he achieved during many arduous years as Foreign Secretary, notably during the anguishing period of 1956 and 1957, when he was so strongly supported by my hon. Friends and myself.
I wish my right hon. and learned Friend well in his new appointment and I am, of course, particularly pleased that I shall be brought more closely into contact with him from time to time over a wide range of fiscal problems. My two favourite Ministers are seated on the Treasury Bench at the moment—the Chancellor of the Exchequer and the Minister of Power. If I have a disagreement on fiscal matters with the Chancellor occasionally, and if I am obliged to express views and opinions contrary to his own, I am sure that he will not think that I wish in any way to derogate his ministerial position, or the esteem which he enjoys in my view.
The White Paper which we are discussing, Cmnd. 1203, is directly the result of the disturbances in the Tory Party last spring and summer, when many of my hon. Friends and myself, loosely and generally erroneously referred to as the Right-wing of the party, were so critical of our Front Bench in the matter of Parliamentary control and accountability of large sums of public money, with special reference to the nationalised industries.
The White Paper is an admirable statistical digest and, in miniature, an economic survey. I treat it as such. My right hon. and learned Friend referred to delineation of facts and figures. That is just about what it is, but it has three notable deficiencies. The first deficiency is that it makes no reference at any point to the large sums of money which these public corporations find from their own internal resources.
For example, during his speech, my right hon. and learned Friend very kindly gave way to me when I put to him an example intended to be in the context of the National Coal Board, which has an investment programme of £96 million for the year 1960–61. I asked to what extent that sum of money is to be found from new borrowing and to what extent from the Board's internal resources, notably from its depreciation account.
I believe it to be impossible to judge the statistics in this White Paper correctly against the economic background of the country today, unless we are given with each capital investment tranche and allacation a clear division as to the per centum and the sum which is being found from the internal resources of the industry and the amount, or remainder, which has to be raised by new borrowing. That is my first criticism. However, this White Paper is the first of its kind and I hope that the Chancellor will consider remedying these matters next year and in future White Papers of this sort.
The second criticism is in regard to the investment of public funds in private industry. I am becoming increasingly anxious and apprehensive as to the accountability of those funds and their extent. May I for one moment survey the commitments which have been made within this sphere during the last two or three years of Conservative administration?
By far the most important example is that of steel. There was £252 million of public funds vested in steel in 1952 when the Conservatives were returned to office for the first time since the end of the war, with a major plank of policy to denationalise the steel industry. After eight years of the processes of denationalisation, the investment of public funds in the steel industry is much bigger than when we started.
I do not want to anticipate the reply of my right hon. and learned Friend to my Question set down for Thursday, 17th November, in which I ask for a comparative figure at the latest convenient date in respect of the investment of £252 million in 1952, but I say to him that a new Chancellor, bringing a new mind, and, I hope, revivified ideas from his days of opposition between 1945 and 1951, should examine this matter and, perhaps, concede to me that the processes of Conservative Government in the last eight years in this context have been the antithesis of steel denationalisation.
We are increasing our steel commitments in respect of new investment of public moneys, because that is being done through I.S.H.R.A., by direct Treasury grant. Where are these large sums of money, to use my right hon. and learned Friend's admirable choice of words, delineated in the White Paper? Are they not public funds? Where do they figure in Cmnd. 1203? I mention steel as only one example, but the second is that of Cunard's with £18 million to be invested; the third is that of cotton with £30 million; the fourth is the motor industry with £9 million; and the fifth is the jute industry.
The Secretary of State for Scotland is in his place, but a Member from Dundee is not present. Admittedly, the Dundee Members did not know that I was going to talk about jute. [Laughter.] There is no cause for ribaldry. Jute is one of the raw material constituent elements in the manufacture of a carpet and I happen to represent Kidderminster and, therefore, jute is one of my constant preoccupations. Why is jute still nationalised? Are not public funds concerned with jute? Why do we not stop, in accordance with our principles, the bulk buying and selling of jute? [An HON. MEMBER: "Get down to brass tacks."] I was talking not of brass tacks, but of jute.
Those are five examples taken at random of large-scale investment of public funds in private industries without Parliamentary accountability. That is the second major deficiency in the White Paper.
I now pass to the third major deficiency. Let me for a moment study the


terms of the Motion, the last few words of which are:
and welcomes the opportunity to debate the financial and economic implications of the programme set out therein.
I always welcome an opportunity to speak in the House on those subjects in which I am specially interested and I welcome this opportunity today, but it does not give me what I wanted when I campaigned last spring and summer for more careful attention to Parliamentary accountability for the expenditure of public funds.
I am impotant—not in a physical, but in a Parliamentary sense—to change, by vote or otherwise, any particular allocation set out in the White Paper.

Mr. Harold Lever: Perhaps that is a good thing.

Mr. Nabarro: It is not necessarily a good thing. Some of the investment figures in the nationalised industries I may adjudge too high and some I may adjudge too low. I may wish to alter them, but I have no opportunity of altering individual figures by Parliamentary amendment, or otherwise.
For example, I consider that the sum of money devoted to electricity, the huge sum of money of £358 million which the Chancellor will find delineated on page 4, in respect of the year 1961–62, is airily explained away by my right hon. and learned Friend as being a capital provision for the increase of generating resources in order to match a doubling of peak demand during a ten-year period. The most modest student of electricity matters knows that the most expensive way of capital investment is to Chase a peak load. Every intelligent economist ought to be devoting his attention, and so should the Treasury, to ironing out the peak load and filling in the troughs, because that leads directly to a substantial economy in capital investment.
For example, in the context of electricity and the huge figure of £358 million, let us judge the different methods of electrical generation. We are considering the generation of electricity from orthodox coal stations. We are considering the generation of electricity by nuclear means. We are considering the

generation of electricity from oil burning stations. We are considering the generation of electricity from the North of Scotland hydro-electric stations. Some are very much more expensive than others, in terms of capital investment, per kilowatt installed.
I have certain definite views upon where the investment should be provided most economically. However, I may discomfort him by my criticisms, the Chancellor of the Exchequer must concede me one point, that the scarcest commodity in Britain today, if not in the whole of the Western world, is capital. The optimum use of capital is most important, and is an essential ingredient of economic progress and expansion. The shortage of capital ought to be dealt with in this House by a meticulous examination of the optimum conditions, and the setting of the capital invested in nationalised industries. Today, we are asked only to "take note" of the expenditure of £358 million for electricity investment, without any possibility of being able to alter the emphasis, as between various methods of generation.
My right hon. Friend the Minister of Power receives recommendations from the Central Electricity Generating Board each year for the sum of money that it wishes to spend on electricity investment. He authorises it. He does not seek the permission of the House of Commons to do so. He works within a Bill brought to this House once every three or four years which prescribes the maximum borrowing powers of the industry. He does not seek the approval of the House of Commons for the individual allocation or granting of capital for a single year in respect of this hugely expensive industry which figures so largely in the capital investment programme before us today.

Mr. Rees-Davies: My hon. Friend may have heard the suggestion I put forward. Would he view, and find acceptable, the suggestion that it is now time for sub-committees of the Select Committee on Nationalised Industries to be set up in this House so that these subcommittees may give their undivided attention to each one of these industries and thereby be able to give some guidance to the appropriate Minister with regard to such expenditure? What is my hon. Friend's view of that?

Mr. Nabarro: I am grateful to my hon. Friend. At the moment, we are thinking on parallel lines on this vitally important matter of public investment, and there is not much between us, save only the method of securing Parliamentary control of it.
I would not use a Select or Public Accounts Committee to do it. I would use an annual Investment (Nationalised Industries) Bill, with eight Clauses. It would be a Treasury Bill. It would be a hardy annual. Each Clause would set down the sum of capital moneys to be granted by Parliament to that industry for a single year. The first Clause would cover coal; the second gas; the third electricity in England and Wales; the fourth the North of Scotland Hydro-Electricity Board; the fifth the South of Scotland Electricity Board; the sixth the two Air Corporations; the seventh the British Transport Commission; and the eighth the Atomic Energy Authority.
The Bill, after receiving a Second Reading in this House, would then pass to a Standing Committee, and such a Standing Committee could debate each Clause separately with a view to amendment in amount, thus giving Parliament control over capital investment in each individual industry. I do not expect Socialists to agree with me, because the Socialist Party believes that all investment is good investment. [HON. MEMBERS: "No."] I do not. I believe that one of the functions of Parliament is to scrutinise the individual investment programme of each of these nationalised industries each year with a view to amendment. We have not achieved that by the laying of this White Paper and an innocuous Motion to take note of its contents.

Mr. H. Lever: rose—

Mr. Nabarro: I will give way when I have finished.
The Parliamentary Secretary to the Ministry of Power, and I see that he is in his place today, made a monumental blunder a few months ago when, on the Third Reading of the Gas Bill, he told the House that Parliament should have no control over capital expenditure on individual projects in the nationalised industries. He said that they were unchallengeable. I do not accept that view.

I think that huge sums of money are being wasted by the nationalised industries because of misplaced emphasis, and I do not consider that the White Paper method that we are now employing, or even the strengthening of committees, which was referred to by my right hon. Friend the Home Secretary in the debate on 25th October, can in any way remedy that state of affairs.

Mr. H. Lever: The hon. Gentleman wants public accountability in the sense that he wants the nationalised industries to present their overall bills for public funds and to have them approved Clause by Clause by the House. Would he also want a breakdown of those figures in detail to see how the global sum for each industry was arrived at? Would each of these detailed schemes have to meet with the approval of the hon. Gentleman and his hon. Friends before they were passed? Does he honestly think that could be done without bringing deliberate rack and ruin to the nationalised industries? There is hardly a more imbecile method of public accountability than the method he proposes.

Mr. Nabarro: I do not think that there is anything imbecile about running a business on commercial lines. Of course, a Socialist thinks that there is. A Socialist will always say that the test of profitability is imbecile, but it is the private sector of British industry which today is paying for the losses in the nationalised industries. [HON. MEMBERS: "No."] Consider coal. I want to talk shortly about the coal industry and its finances. The losses of the coal industry at 30th June last had reached the astronomical figure of £64 million.

Mr. Finch: Due to Government inefficiency.

Mr. Nabarro: I did not interrupt the hon. Gentleman when he spoke. I listened carefully to what he said.
Losses forward at 30th June last amounted to £64 million. In addition, there is £140 million tied up in unsaleable coal and coke stocks. The proper figure for undistributed coal stocks in normal conditions, should be £40 million. Thus, there is £100 million tied up or sterilised in excessive stocking. When added to the total of £64 million


losses forward, there is a total of £164 million of public moneys totally sterilised.
I think that my right hon. Friend the Minister of Power will find himself, either shortly before Christmas or shortly after, in the unenviable position of having to come to the House and ask for more money for the National Coal Board. He will get a very hostile reception from me and many of my hon. Friends. [Laughter.] This is no laughing matter. One of the reasons why I was obliged to attack the 1960 Budget was because it offered no reduction in taxation. Of course, we cannot offer reductions in taxation when we are transferring above the line the £90 million loss on railways. What will follow inevitably, as day follows night, is that the Treasury will be tempted to do the same thing with the coal industry and transfer the loses forward above the line, thereby making it a direct burden on the shoulders of the taxpayers.
The Socialist Party regards this as commonplace because of its philosophy for financing losses in nationalised industries. I believe that nationalised industries have a supreme test to be applied to them—the test of profitability—and that whenever they earn a loss at the expense of the Treasury it has to be supported by the already overburdened taxpayers.
Since I do not minimise the difficulties of my right hon. Friend the Minister of Power in this matter, I would ask him whether he proposes to bring to the House a Statutory Instrument for Coal Board finances before Christmas or shortly thereafter, having regard to the fact that the borrowings of the Board this year will be more than £75 million in excess of its borrowings a year ago. When he replies I hope that he will tell us the extent of the loss forward of the the Coal Board, which stood at £64 million on 30th June last, and will also tell us what it was on 30th September last—because that has a direct bearing on the investment figures in the White Paper. We would not be considering so much, in terms of capital expenditure, if such industries as coal were not losing large sums of money.

Mr. Lee: If the hon. Member is to make a test of commercial viability he

should also mention the question of the importation of foreign coal, which cost a great deal of money. He should also agree that Government interference, which prevents the Coal Board functioning on a commercial basis, should not take place.

Mr. Nabarro: I do not ignore that. The hon. Member must have heard me make many speeches on the coal industry. I never ignore unpleasant facts. I am not dealing only with the coal industry. Nevertheless, I will answer the hon. Member. The answer is, "Yes, the Coal Board put up its price by the record sum of 15s. per ton in 1956." The hon. Member remembers the occasion. I led 26 Conservatives into the Lobby against the Government at that time.
The Coal Board's action was taken to offset the losses incurred in the importation of 12 million tons of North American coal. We have stopped importing coal now, but the Coal Board does not put its price down; on the contrary, it puts it up still further. That is the answer, in part measure, to the derangement of the Board's finances and the policy, on the part of the Board, of so putting up the price of South Wales coal as to make it more attractive to steel companies operating in South Wales to bring in North American coking coal after hauling it all the way across the Atlantic and landing it at Port Talbot or Swansea. That North American coal is still cheaper for steel mills than Welsh coal. Surely that is a disastrous policy.

Mr. Lee: indicated dissent.

Mr. Nabarro: It is no use the hon. Member shaking his head. The plain fact is that a statement to that effect was made by the Chairman of the Federation of British Industries the day after the latest coal price increase came about. Economic wizard though the hon. Member may consider himself to be, he must not contradict the chairman of the Federation of British Industries, speaking on behalf of thousands of British industrialists, whose economic facts and figures are surely far more accurate than those derived from the pigeon-holes in Transport House and fed as a brief to the hon. Member for his speech this afternoon.

Mr. Lee: I would point out that the figures to which the chairman was


referring were based on the cheap freight rates which obtained when he spoke. Those have now risen. Further, steel has a 10 per cent. tariff to protect, whereas coal has not.

Mr. Nabarro: If we get on to the question of tariffs I shall be drifting from the White Paper. Any manufacturer in this country today has a duty to buy his raw materials in the cheapest market, just as the electricity industry is now considering using more oil and less coal. Because of the latest price increase it will be more economic, in certain power stations distant from the coal fields, to use oil instead of coal.
I now pass to my final point, which concerns the reference by my right hon. Friend the Chancellor to the tax structure. Our tax structure is in many respects archaic. In other respects it is anaemic, and urgently needs reform and overhaul. I cannot indulge in detail in budgetary considerations this evening, but I put it to my right hon. and learned Friend that a change in many aspects of the tax structure is long overdue. For years, to encourage investment, we have adhered slavishly to a system of capital allowances, including both investment allowances and initial allowances. They are nearly useless to industry today, and are often no longer wanted—especially the initial allowance.

Mr. Douglas Houghton: indicated assent.

Mr. Nabarro: I am glad to see that the hon. Member nods assent. Capital allowances cost the Treasury about £200 million a year. What the Treasury is giving out, on the one hand, in capital allowances, including initial allowances, and investment allowances, it is collecting, in the other hand, in the form of Profits Tax, which is now standing at 12½ per cent. It is nearly an equation.
The whole of British industry would be stimulated today to greater productive effort, notably in the export field, if this cumbersome system of giving subsidies in the form of capital allowances, on the one hand, and, on the other, of imposing a direct taxation on industry to pay for them, in the form of Profits Tax, were abolished. I plant that thought with the Chancellor five months before his Budget. I am not alone in expressing this view. After this debate

he can go to the Treasury and search out very respectable writers and economists who, in the last few months, have supported it, as a desirable means of simplification and of providing a greater incentive.
I do not think that all public investment is necessarily good investment. The House of Commons requires much greater discriminatory powers in dealing with these huge sums of money. Though we have a two-day debate on the matter, a Motion to "take note" of the White Paper does not furnish the opportunity to make use of the penetrative powers of Parliamentary accountability which I new believe are urgently necessary.

7.17 p.m.

Mr. Francis Noel-Baker: There was not very much in the speech of the hon. Member for Kidderminster (Mr. Nabarro) to attract hon. Members on this side of the House, or, indeed, many of his right hon. Friends, but he did us a service when he illustrated clearly the fundamental difference of approach between him and us towards the nationalised industries. He said that the supreme test of these industries must be profitability. We have heard that point put insistently by a number of his right hon. Friends, including the Minister of Transport.
I want to refer briefly to those parts of the White Paper which deal with the British Transport Commission. We discuss them today in unsatisfactory conditions, because we are waiting for the White Paper which will tell us the final decisions the Government have taken as a result of the investigations and reinvestigations—the appraisals and reappraisals—of British Railways and the Commission which have taken place ever since the Government took office nine years ago.
At the moment, the outlook is uncertain and obscure. We are led to suspect that the drastic reorganisation which the Prime Minister called for on 10th March is going to do great damage to the transport system. We can only hope that the plea put forward by the hon. Member for the Isle of Thanet (Mr. Rees-Davies) this afternoon will have fallen on deaf ears, at least among those in the Government. While the Minister was out of the Chamber his hon. Friend


was making a powerful plea for the hiving off of almost everything except rolling stock and railway lines. I very much hope that the Minister has not been advised to do this in the recommendations of the Stedeford Committee and the other people to whom he has been listening in recent months.
At the beginning of the debate, the Chancellor expounded a slightly less drastic criterion than did the hon. Member for Kidderminster in judging the performance of the nationalised industries. The Chancellor said that any investment in public industries must be justified either in the form of higher production or of reduced costs. We heard from the Parliamentary Secretary and from the Minister of Transport—and we have been hearing it over and over again—that the basic test in transport, and railways in particular, must be economic viability and profitability. What is missing in the Government's appreciation of the situation is any reference to better service. Is not that a factor in the handling of a nationalised industry?
How, for example, does the Chancellor of the Exchequer or the Minister of Transport apply this criterion of economic viability and profitability to any of the big road schemes? How does the Chancellor of the Exchequer calculate the yield in percentage of investment on the Hyde Park Corner redevelopment scheme or the building of the M.1? Some time ago there was an attempt to produce some very bogus figures in terms of economic benefit to show that the M.1 would pay for its capital cost in ten or fifteen years. But such a test cannot be applied to many of the public services in this country, and this insistence by the Minister of Transport and his Parliamentary Secretary on profitability and economic viability worries us very much indeed.
There are large sections of the transport industry which obviously cannot be made to stand up if they are regarded only from that point of view. I will take a simple example which is mentioned in the White Paper, that of the London Transport Executive. How can the Underground Railway system be expected to operate purely on the basis of economic viability and profitability and at the same time deal with the peak loads which it has to face twice a day

under present industrial conditions? Either we have chaos in our traffic conditions, or we shall have to invest public money in a system which is to provide a public service but which may not necessarily be run at a profit.
This same outlook faces the railway system as a whole. In this country we tend to debate the problems of running an effective modern railway system as if no other industrial country had faced them before. Throughout Western Europe and the rest of the modern world industrial countries have been through the difficulties which we are now facing. They have efficient and up-to-date modern railway systems which they have achieved by heavy capital investment at the end of the war and by providing the public money required to run them as an efficient public service.
When one looks at the situation in Germany, Scandinavia, Holland, Belgium, France, Italy and Switzerland, one realises that we are far behind. The fundamental reason is that we have invested too little and too late. The Minister would be entitled to say that the Labour Government of the early post-war years must bear a share of the blame for that, and I would be the first to admit it. At that time there were many urgent demands on the then Chancellor of the Exchequer and, perhaps, the Minister of Transport in those days was not able to press his claims as effectively as he might. There is no way out of the present difficulties facing British Railways if the Minister is determined to contemplate them only in terms of profitability. There will be chaos in the transport picture as a whole unless he accepts a high level of investment and the possibility of subsidies for a good many years to come.
Behind that lies the wider question; until the Government are prepared to look at the transport system as a whole and are prepared to divert traffic, whether freight or passenger, from one section to another, the problem of British Railways will not be solved. I noted the statement, or the plea, of the hon. Member for Kidderminster. He was asking for what amounted to much more interference in the investment programmes of the nationalised industries. One of the crippling difficulties with which the Commission has had to contend over the last few years


has been its inability to plan ahead. I cannot believe that the hon. Gentleman is seriously suggesting that once a year we should look at the investment programme in each of the nationalised industries and chop bits off if we feel inclined. How could those industries plan for the future? The Minister himself referred to this difficulty during our last debate when we were discussing the future of the Commission. The right hon. Gentleman said:
The Commission itself … has difficulties. It is handicapped, for example, by not knowing how much money it will get for more than a year ahead. This is a real problem, and we are trying to find an answer to it."—[OFFICIAL REPORT, 26th October, 1960; Vol. 627, c. 2367.]
As the right hon. Gentleman well knows, that is a very real problem indeed.
This is one of the difficulties which is illustrated by the White Paper. One looks at the figures for investment by the Commission and sees some rather puzzling figures for 1961. I am not clear about what is to be the total amount allowed. Halfway down the last column we see a figure of £125 million, but further down, and subject to review, there is a further figure of £15 million. The Chancellor of the Exchequer referred, I think, to £140 million during his speech. I hope that the Minister who is to reply for the Government will do us a favour and explain the position.
A glaring omission in the White Paper is the absence of any figure for 1962. The Commission is in an impossible situation when it does not know from year to year what is to happen next. The Chancellor of the Exchequer referred to the explanation which he said had been given by his right hon. Friend the Minister of Transport about the basis for financing the operations of the B.T.C. in 1961–62. I have failed to find any explanation of that basis either in the recent statements of the Minister or in the White Paper. It seems to me that one of the difficulties about the present situation is that the Commission is now being required to submit to the Ministry any expenditure over £250,000. Since the setting up of the Minister's compact study group there has been a great increase in Government interference. No doubt the Minister is served by a number of admirable public-spirited, conscientious civil servants who advise him in these matters. But we believe they

are quite unqualified to deal with management decisions of the kind in which the Commission is involved.
There has been talk of a new marshalling yard at Swindon. This has been looked at inside out by the Regional Board, on which there are a number of qualified business men. I have sometimes complained about the composition of these boards, but at least the members are qualified businessmen—if they are not, the Minister should turn them off the board and replace them with people in whom he has confidence. Then, the B.T.C. looks at the matter in a wider context. Is it really necessary for the Minister to get together with a small group of civil servants and look at it again? This seems an unrealistic way of dealing with Government expenditure.
One point which is not made plain in the White Paper is that although we talk about these investment figures, and some hon. Members refer to them as though all the money was being voted by this House, the fact is that a lot of it comes out of the resources of the industries themselves. In the context of British Railways, half the money spent is being spent on replacements. How on earth does the Chancellor of the Exchequer's criterion apply in the case of the replacement of a worn out steam locomotive, which may be 30 or 40 years Old, by an up-to-date diesel engine? How does one calculate the yield on that in terms of percentage of investment?

Mr. Nabarro: My answer to the question posed by the hon. Gentleman is that one calculates it in exactly the same way as one calculates the potential yield of every other capital asset bought by any private enterprise business. That is what we ought to be doing with the railways—running them as an enterprise and not as a State bureaucracy.

Mr. Noel-Baker: I think that the hon. Gentleman would find himself in considerable difficulty in trying to calculate the yield in terms of a percentage on investment when dealing with a replacement problem of that kind. The point that I was making is that about half the expenditure of the B.T.C. is for replacing worn out locomotives, carriages and wagons and on maintaining and replacing its existing assets.
I want to say a brief word about the investment on roads. We note on page 19 of the White Paper, paragraph 45, that £150 million is to be given by the Exchequer over the next five years to pay for classified roads. This will no doubt be very welcome to those responsible for carrying out this work. They are in a position to plan over a period of five years, but the British Transport Commission is being hampered by the fact that, from year to year, it does not know what will happen next. Judging it in relation to the road problem, we think that this is very unfair discrimination, of which we see many other indictments in the attitude of the Minister towards the railways.
I want to refer to the Stedeford Committee, which is mentioned in paragraph 39 of the White Paper. As the Minister knows, I had a Question down to him this afternoon, which was not quite reached, so we could not discuss it orally, but I have in the meantime had a written answer. There is very strong feeling among railwaymen, and, I believe, among the managements of the railway regions and in this House, about the hole-in-the-corner way in which the Stedeford Committee has been operating. We still do not know the names of the civil servants who are on that Committee. We do not know how the Committee operated, and we do not know what witnesses it saw. We do not know what procedure it followed, and apparently, according to the Minister's Answer, we are not to be given any of the evidence or, indeed, the recommendations of the Committee itself. We think that is very undesirable when we are engaged in dealing with a public industry of this kind.
The hon. Member for Kidderminster has spoken about accountability to Parliament in handling nationalised industries. We had hoped in years gone by that one of the advantages of nationalising these industries would be more rather than less accountability to the public. This cloak and dagger way of dealing with the railways causes very great resentment among railwaymen. The way in which the Minister has dealt with the operations of the Stedeford Committee, his handling of that, makes us wonder what he is going to do with the Select Committee's Report, and whether we are to understand that all the work

done by the right hon. Gentleman the Chairman of the Select Committee on Nationalised Industries and his colleagues, and the very admirable Report that they have published, is now to be thrown to the winds and replaced by the secret conclusions of a quite unrepresentative and irresponsible—I use the word in its technical sense—Committee presided over by Sir Ivan Stedeford.
I conclude by making a further plea for a greater degree of accountability to this House of the operations of the British Transport Commission and of the railway system. It is quite plain that the events of recent months have meant a very great increase of intervention by the Minister in the affairs of the Transport Commission, particularly in relation to the railways. Sir Brian Robertson and his colleagues of the Transport Commission are powerless unless they are working in the closest co-operation with the Minister, and they are subject to his dictates at every turn.
What, then, is the situation which has arisen from this? The Minister of Transport effectively having to run the British Railways himself at the present time. This makes it all the more desirable that the House should have adequate control over what he does. The sad fact is that in recent years one gets the impression that the Transport Commission and the boards of some of the other nationalised industries are not more accountable to the public than in years gone by, but less accountable. Here we have great nationalised corporations, and the consumer consultative bodies set up are really a complete farce and appear to have no influence whatever. We cannot ask Questions in the House of Commons, except by getting round the rules of order, which we do from time to time, and we cannot get at the boards. It is very difficult. I go to see the general manager of the Western Region and the chairman of the Board, but they are far less accessible than the board of a private company would be to its own shareholders or, perhaps, even to Members of Parliament.
I make the plea to the Minister and his colleagues that if we are to have a situation where a great public industry is effectively to be run by the Minister, we ought to be given every opportunity of questioning him about it, and he should


be responsible, like the Parliamentary Secretary to the Ministry of Transport during the war, for answering Questions about the railways and other aspects of the Transport Commission. We ought to have a greater degree of Parliamentary control.
We have been in difficulty in discussing this section of the White Paper—a very important one—because of the uncertainty facing the railway industry. Over the nine years that the Conservative Party has been in office, the railways have been investigated, reinvestigated, looked at, assessed and appraised until the railwaymen and their managements do not know what will happen next. We hope that we have reached an end of this process and that when we get a Government White Paper it will be a final policy, so that the railway managements will know in what kind of direction to operate in the future and be allowed to get on with the job.
I add to that the plea that when we discuss a similar White Paper next year the Minister will see that the British Transport Commission, in particular, is able to plan and know what will happen two or three years' ahead at a time rather than less than one.

7.37 p.m.

Mr. R. Gresham Cooke: While the hon. Gentleman the Member for Swindon (Mr. F. Noel-Baker) has made some interesting observations about the railway situation and accountability, out of his special knowledge, which I fully recognise, he will have to face the question of the profitability of the nationalised industries. I do not think that it is any good the Government going on borrowing money at 5 per cent. or 6 per cent., or whatever is the market rate for money, handing it over to the nationalised industries, and then getting no return for it.
That is the difficulty that Parliament is in at the present time and why we have to go so carefully into these matters of their viability in the future.

Mr. Leslie Spriggs: If the hon. Member feels that we must take into consideration the profitability of the Transport Commission's undertaking, can he tell me why the Minister of Transport and the Government have refused to

allow increased charges from time to time, over periods of many months, thereby losing many millions of pounds for one financial year?

Mr. Gresham Cooke: I do not think that that has anything to do with the Minister of Transport. That is a matter for the Transport Tribunal and for the railways to make their case before the Tribunal.
I consider that this is a valuable debate on the White Paper, half-way through the financial year, and I am sorry that my hon. Friend the Member for Dorset South (Viscount Hinchingbrooke) is not here—I understand that he is in Africa—because think that it was very largely due to him and his hon. Friends, and especially my hon. Friend the Member for Kidderminster (Mr. Nabarro), that we are having this debate today.
The White Paper sets out more fully than we have ever had before the position of public investment. It is £1,730 million this year. In going through the White Paper, I have been interested to see what a wide field it covers, because there are no fewer than 130 items in it, covering everything from new collieries, railway electrification, housing, postal mechanisation, and hospitals, down to minor matters like slaughterhouses. Those are items for which Parliament is responsible and great responsibility falls on the Government, on the Treasury, on the Estimates Committee, and on this House to see that the Government's contributions for all these different items are well spent. That is why we are having this debate on accountability.
I shall have more to say on it in a moment, but I do not quite take the view of my hon. Friend the Member for Kidderminster, who would like to go through the capital items one by one. I do not know whether that is practicable, but I should like to look at it in the large. We should like to see each of these nationalised industries becoming profitable in future. If we did that, I think we would be solving our problems on accountability. I shall make some positive suggestions about that later.
Of the gross capital formation of £1,730 million, the net capital formation is only about half, which is £834 million, about 4 per cent. of the gross national product. That is because our stock of houses, buildings, railways or rolling


stock and the rest is depreciating year by year. It is being worn out and we have to take the depreciation off the gross before we get the net figure. I have often wondered what is the depreciation of the Houses of Parliament. I do not know whether the Treasury lays aside 2 per cent. every year for that. The Houses of Parliament were depreciating very much a few years ago. They were losing ground—or rather stone—but recently much money has been spent. I suppose that we can add to the gross national product the improvement of the House of Commons.

Mr. Willey: Does it show a profit?

Mr. Gresham Cooke: We may even show a profit in due course.
When one looks at the total figures one realises that five nationalised industries are accounting for the bulk of these figures, no less than £699 million capital in the forthcoming year. If last year is to be any guide, I suppose that about £500 million of that will be borrowed. We shall see the figures later, but £500 million was borrowed last year and that borrowing is more than the national savings which are collected. Therefore, some of it will have to be found out of revenue.
Incidentally, when I listened to the hon. Member for Newton (Mr. Lee) I could not help thinking of an argument put forward over the last year, a logical argument it might be said, for nationalisation. It was that if one had the commanding heights of the nation, if one had nationalised industries, one could do economic planning on a long-distance scale. First, I should comment that the Renault factory, in France, where 3,000 workers have recently been sacked, is not a very great advertisement for nationalisation.

Mr. Cyril Bence: It is not nationalised.

Mr. Gresham Cooke: The point is that if the Government were to use these commanding heights of the nationalised industries to control the economy they would have to fiddle about year by year and alter programmes very rapidly. It would be difficult to alter long-term programmes quickly, because they are long-term. That would contradict the point made by the hon. Member for Newton,

when he asked for long-term programmes which were not altered. I say that in passing, on the old argument about the commanding heights.
This capital expenditure on the nationalised industries of £700 million in the coming year will not, of course, solve the problem of the nationalised industries. It will still leave them far from being self-financing. That is our difficulty. From my own experience, and the experience of anyone in industry, I should say that the usual industrial principle is that a board of directors tries to finance any replacement of plant out of its own resources and its profits, even if the replacement may cost four or five times what it would have cost twenty years ago.
If it had a piece of machinery which cost £1,000 years ago and might today cost £4,000, or about £5,000, the company would try to replace it out of its reserves. It would go to the money market or outside assistance only when it had a new project, a new factory or an extension to undertake. On that principle, I wish to look for a moment at our various nationalised industries.
I take first, the Coal Board. I suppose that there would have been a moment a few years ago, if the price of coal had been allowed to rise to what it would have fetched in the days when there was a shortage, when the Coal Board could have been self-financing, at least for replacements of its machinery. That day has now passed because, if it wants to replace a washery costing £1 million or £2 million, it cannot do that out of its own profits, because there are none. It has to borrow money from the Government. That is its practical difficulty.
Half the modernisation programme of the British Transport Commission consists of replacements of rolling stock, signal boxes and so on. It is difficult to disentangle the finances, but I should not have thought that the Commission would pay more than about a third of capital expenditure every year out of depreciation reserves. Even the replacement of stock of the Commission has to be paid for out of borrowed money. Therefore, it is not a self-financing organisation. Nor do I think are the Airways Corporations self-financing in the sense of paying for their own replacements. I was adding up all the aeroplanes, referred to on page


16, which the Airways Corporations are buying in the present year and next year.

Mr. Spriggs: Will the hon. Member give way again before he leaves this point about transport? He said that nationalised industries should pay for replacements out of their own finances, or at least that is what they should work towards. We all wish that the boards could do so, but I wish that he would take into consideration what the Government have done. The most remunerative part of the Transport Commission's undertaking, long-distance road transport, has been hived off and sold to private enterprise because it was making huge profits. That makes it impossible for the Commission to pay its way.

Mr. Gresham Cooke: That is a very small part. I think that the profits on road haulage were about £5 million.

Mr. Bence: £7 million.

Mr. Gresham Cooke: It is a very small part of the £170 million a year capital. I wish to pursue this point, because it is worth analysing.
The Airways Corporations, during the present and next year, are to buy 114 planes. I think that a great many of those will be replacements of the old stratocruisers, and so on. There are to be 15 Boeing 707s, 35 Vickers VC10s, 10 Vickers Super VC10s, 10 Comet IVBs, 20 Vanguard V951s and 953s, and 24 de Havilland Tridents. They are replacements of the present stock of aircraft, but I do not think that the Corporations can finance these replacements out of their present profits. I recognise that they are in a special position, because they are up against foreign competition.
Electricity has a vast programme of capital expenditure, £358 million. I ask myself how much of that is to come out of its own reserves. I think that at least half ought to if it is run on a proper basis. We are quite proud of the Central Electricity Authority, which appears to be doing so well, but is it really a business success in the terms that I have expressed? Is it really making a fair competitive return? If it is not, how can it if it is to charge a unit price which is the same all over the country?
Must the nationalised industries always work on the old Post Office principle,

the 1d. stamp principle, of charging the same whether the service is in the North-West or the South of England? Should somebody who lives half-way up to the summit of Snowdon, and who is supplied with electricity, pay the same per unit as a person in the Midlands who lives near the works from which the electricity comes?

Mr. Spriggs: Why not? It is a public service.

Mr. Gresham Cooke: That is what I am disputing. I am saying that because the Post Office was a public service and introduced the 1d. post, the principle has been followed for all these corporations, and I do not think that it is the right principle. Something nearer the cost of supplying a unit of electricity should be charged, according to the cost in the various regions. If the people of the Lake District want to keep a branch line open, I think that they ought to be offered the opportunity of keeping it open, if they are prepared to pay 6d. a mile, for example, or whatever is needed to keep the line open. If the people in a district want a railway line, it is not necessarily right that they should continue to pay the same charge as anyone else in the country for such a service.

Mr. E. Fernyhough: Will the hon. Member extend that principle to the roads for those in rural areas who have motor cars?

Mr. Gresham Cooke: A person who runs a motor car already pays, because the more he uses his car the more tax he pays on his petrol.

Mr. Fernyhough: That is not the same argument at all.

Mr. Loughlin: Will the hon. Member give way?

Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): Order. Unless the hon. Member for Twickenham (Mr. Gresham Cooke) gives way, it is not in order for another hon. Member to intervene while remaining seated.

Mr. Gresham Cooke: Thank you, Mr. Deputy-Speaker. I am putting forward this principle for consideration, although I recognise that hon. Members opposite will not accept it straight away. I hope that they will seriously consider whether


we should not allow the nationalised corporations to make different charges in different parts of the country in order to recover the relevant costs and thereby to make the industries more viable than they are at present.
In London, for example, many people would like to see the Victoria Tube built. It would cost £50 to £60 million, and at the present rates it is uneconomic, we are told. I have been looking at the figures, and as far as I can see, if all fares in London Transport were raised by a small percentage—3 to 4 per cent., perhaps—there would be a sufficient return to London Transport to pay for the Victoria Tube. As members of the public we should ask ourselves whether we want that facility, and we ought to be prepared for the fares to be raised by a small amount to pay for it, not try to keep the fares down to 3d. between two stations, or whatever it is, for ever and ever. We ought to try to help the nationalised corporations in that way.
If the Government say that they cannot find £50 to £60 million for the Victoria Tube, I suggest that London Transport should be allowed to go to the World Bank for it. Recently, I was in Japan, with the Inter-Parliamentary Union. I called on the Japanese National Railways and was informed that they are to build a new line from Tokyo to Osaka, which is their equivalent of the London-to-Manchester main line. It will be an entirely new line for 300 miles, and it will be of high technical excellence. There are to be trains with a maximum speed of 140 m.p.h., averaging 100 m.p.h., the journey of 300 miles will be done in three hours, and the trains will compete with aircraft.
They are borrowing £170 million from the World Bank for that line. I wonder why we should not do the same. It may be said that the World Bank was set up for underdeveloped countries, but London is an underdeveloped city; we live in a jungle of traffic, and one has to be a Tarzan to jump between the cars. If the Victoria Tube were built it would be the bulldozer of the jungle of London traffic in Piccadilly and elsewhere. I suggest that as Members of the House and of the public we ought to be ready to pay a fair economic price for the services of the nationalised industries if

we want to see them continue. We ought to accept that principle which, incidentally, would lighten the load on taxation.
I turn for a moment to the private investment referred to in the White Paper, which amounts to no less than £2,095 million of capital formation this year. There has been much criticism today from hon. Members opposite stating that we are at the bottom of the league in all sorts of ways and that there is stagnation in this country. The other day I read a most interesting analysis by Professor Barna that since the war the amount of capital per worker has increased by 25 per cent. in the United States, by about 30 per cent. in West Germany and by 70 per cent. in the United Kingdom. The worker has that extra amount of capital behind him.
I know that this is surprising and that we must take into account the flood of refugee workers into Germany. If that is borne in mind against the new capital formation, it may be that the German figures are nearer the British, but it remains clear from those figures that we have done a good job since the war in the United Kingdom in capitalising and in giving the man on the bench increasing capital behind him.
But we must not be complacent. I mentioned the new Japanese railway to Osaka. I was highly impressed by the technical efficiency of the Japanese railways, by carriages with aircraft seats, radio telephones, and all the rest of it. They have not one wooden carriage left in Japan, whereas we still have a few left over here. Wherever one goes in Europe there is evidence of tremendous capital improvement, with great new roads being built. Soon a motorist will be able to travel on a dual carriageway from Ostend to Brindisi, with the choice of two tunnels through the Alps. We must not be complacent. I should like to be able to say that in ten years, for example, we should have a dual carriageway from Dover to Glasgow.
As has been said frequently in the debate, we are short of capital and we must continue and intensify our savings drive. But when the ordinary man in the street puts his money into the Post Office or National Savings, and receives his interest, I do not think that he realises the purpose to which that money is being


put, and I suggest to the Economic Secretary, for him to pass on to the Chancellor, that we should have a new savings drive and should make it clear to the man in the street that his savings are going to very constructive purposes and are being used to re-equip the coalmines and the railways, to build houses, and for all the constructive social purposes which we want to carry out.

Mr. Bence: This is dangerous, for the British worker is not unintelligent. If he is told that when he puts his money into the Post Office at 2½ per cent. it will be used to build houses, and he then reads in the newspapers that those who build houses are paying 6 per cent. to somebody else, he will want to know who is receiving the difference.

Mr. Gresham Cooke: That is a very ingenious argument, but I will not go into it today. A local authority may be charging a rent to pay for money borrowed for other purposes, for example. The broad issue is that the savings of the man in the street are being used for national, constructive purposes, and this ought to be made clear to him. I made the point in a speech the other day, and several people saw me afterwards and said that they had never realised the purpose for which their savings were being used. This was quite an intelligent audience, although not in my constituency.
In addition, we have to interest the man in the street to invest in British industry, and that is why my hon. Friend the Member for Halifax (Mr. Maurice Macmillan) and myself have been interested in the question of wider share ownership, and have been promoting a committee to advocate wider share ownership.
I believe that there is and will come an opportunity for the man in the street to invest in British industry just as much as there is the opportunity to put his money into the Post Office and National Savings. This is something that we ought to encourage, because it will take the strain off the City and the Government if the man in the street can do that. I hope my right hon. and learned Friend the Chancellor will be able in due course to relieve the first £15 of investment income from taxation, just as Post

Office savings up to that amount are relieved at present.
The world is short of capital, but we on this side of the House say that we do not want any compulsory savings scheme of a Communist nature, such as there is in Russia, or of a Socialist nature, although I do not expect that hon. Gentlemen opposite will agree with that. We are short of capital, but we could meet our capital demands by voluntary savings. We want a great new drive for voluntary savings, for both national and industrial purposes, so that the country can modernise itself out of capital from our own savings.

8.1 p.m.

Mr. Bruce Millan: I do not want to follow the hon. Member for Twickenham (Mr. Gresham Cooke) in all the things he said, but I should like to refer to two of them. First, I do not want to deploy the arguments for and against wider share ownership, but it seems to me to be extraordinarily inaccurate for the hon. Gentleman to talk about wider share ownership and working-class people investing in shares in private industry as in some way taking the strain off the Government. I should have thought that exactly the opposite would in fact happen, and that if we encouraged people to invest their small savings in shares we should be diverting savings from National Savings. I should not think that even this Government would look with favour on any proposal to treat for tax purposes investment in private industry in the same way as we at present treat investment in Post Office savings.
The second point on which I take up the hon. Gentleman is on the question of the pricing policy of the nationalised industries, on which I shall have something to say later. Let me take up the hon. Gentleman on one point which he made. He seems to be in favour of the idea of the nationalised industries, so far as possible, financing their own capital investment, and I do not necessarily disagree with him on that.

Mr. Gresham Cooke: I said that I should like them to finance the cost of replacement capital.

Mr. Millan: Well, replacement or capital investment, as far as possible, from savings It seems to me that the question of the prices charged to one consumer as distinct from another is completely irrelevant from this point of view. I agree with his argument as applied to the general pricing policy and the level of prices charged by a nationalised industry, but the imposition of a discriminatory price on a particular class of consumer, according to the cost of supplying whatever commodity it is, seems to me to be completely irrelevant to the question of overall savings. A great many of us, if not all of us, on this side of the House, and perhaps also some hon. Members opposite, who represent remote constituencies, for example, would very strongly oppose any idea that the electricity industry, to take an example, should try to recover from individual consumers or individual classes of consumers the full economic cost of supplying them with electricity, because one of the important arguments for nationalisation and one of the main aims of nationalisation of the electricity industry was precisely to do the opposite—to bring to people to whom it was uneconomic to give a supply, a supply which enables them to share the amenities which other people have in more fortunate circumstances.

Mr. Gresham Cooke: I know the arguments on both sides. It is not irrelevant to what I was saying. We all know that the nationalised industries have had services and pockets of services which are unremunerative. All I am saying is that in these cases the charges ought more nearly to approach the cost than they do at the moment.

Mr. Millan: What the hon. Gentleman just said is no contradiction of what I have said. There are branch lines on the railways, for example, where one does not really have to hold the view that in no circumstances should the branch line be closed. I quite agree with him about that.
The hon. Gentleman in fact contradicted himself, because when he started to talk about the proposed Victoria underground line in London, what he should have said was that people using that line would pay the full economic cost of providing the service. What he did suggest, and this is the contradiction,

was that all the underground consumers, the people living in London, should bear part of the cost, and that seems to me to be completely contradictory of what he said before.
I want to make another two general points before going on to deal with the question of the capital investment programme for the nationalised industries, which I understand is the main subject of this debate today. First, on the general level of investment in this country, I thought the Chancellor of the Exchequer dealt with it completely inadequately. He began by admitting that certain P.E.P. and other documents demonstrated that, in terms of comparison with other leading industrial countries, Britain is in a very bad position for capital investment and various other aspects. He said in defence of this only that one had to take account of the starting levels. There are certain of these tables, which various hon. Members have quoted today, which are relevant in themselves without regard to any starting level.
For example, the proportion of the national income which goes in gross fixed capital in any one year is a figure which could be taken one year with another, without regard to any starting year of 1950. In that comparison, for example, we come out extremely badly. Secondly, the figures quoted from the P.E.P. report are mostly on the basis of 1950 figures when it is a question of quoting the percentage increase over a number of years. It is remarkably ironical that the Chancellor of the Exchequer should be saying that we are starting from a higher level than other industrial countries when the basis was 1950. We are quite willing to admit that, because in 1950 this country had had five years of a Labour Government during which time we had, in fact, topped the league of industrial nations on the very things that are now worrying us.
The general approach of the Chancellor on this question was a complacent one, and I am glad that the hon. Member who has just spoken has said that we have no grounds for complacency. We have still got this continued complacent attitude on the part of the Chancellor of the Exchequer and other members of the Government. I hope that the right hon. Gentleman who is to wind


up the debate tonight may have something more to say about what the Government intend to do to ensure that our general level of investment is improved and comes more in the line with the percentages which other industrial countries are getting at the present time.
The second thing I want to say—and I am perfectly willing to agree with the hon. Member for Kidderminster (Mr. Nabarro) on this if on practically nothing else—is that I hope all of us on this side agree that we ought to have at some time a White Paper dealing with the public funds going to private enterprise which is at least as informative as the White Paper which we have today. I think we should make a great fuss about this, because there are large sums of money now going to private enterprise and there is a remarkable lack of accountability for these large sums of money.
Now I turn to the main question of the capital investment programme of the nationalised industries. I was struck today by what the Chancellor had to say about the extent and limitations to which the Government could have recourse in giving instructions to the nationalised industries on their capital investment programmes, from the point of view of influencing the general running of the economy. When the resources of the economy were overstrained, the nationalised industries could be told that they should reduce their capital expenditure. When a certain boost to the economy was required, they could be told that their expenditure could be stimulated as rapidly as possible.
This is so, and it is one of the arguments for having a substantial sector of the economy in public hands. It is an argument which is contrary to many of the criticisms of nationalisation made from time to time by members of the Government and hon. Members opposite generally. I should prefer to see this general use of the nationalised industries treated as something which should be done as part of a policy over years and not something which should be relied upon to get the Government out of temporary difficulties.
One of the significant happenings of the last few years has been that the Government have used the nationalised

industries in an attempt to get them out of what they considered to be temporary difficulties. They did so in 1957 and 1958, imposing on the nationalised industries what they term in the White Paper "short-term adjustments". In some instances short-term adjustments, so-called, can have serious effects on the nationalised industries. There is a mention in the Report from the Select Committee on Nationalised Industries, British Railways, of an instance when the British Transport Commission had to pay penalties to contractors for the cancellation of contracts. Such happenings cause, at the very least, considerable irritation in the nationalised industries.
If I felt that short-term adjustments were really effective and had even a marginal effect on the economy, I should perhaps look upon them with a certain amount of favour. I doubt whether a short-term adjustment policy, an example of which was the Government's instruction to the nationalised industries in 1957 that they must reduce their capital expenditure and their instruction a year later that they must stimulate and increase it, works at all. It causes much irritation and I doubt very much whether, in the context of the economy as a whole, it is an effective way of trying to impose Government policy.
One paragraph in the White Paper says that over the last few years there has been a tendency for the programmes of public investment not to be fully expanded—in other words, there is a certain short-fall one year with another. One of the reasons for this is that people generally—this applies to the nationalised industries as well as to private industry—take a too optimistic view of the amount of money they will spend. If people are asked how much money they intend to use on capital expenditure in the next year, they tend on the whole to estimate too high.
If the Government tell the nationalised industries that they want a certain cut in their expenditure and at the end of the year find that the nationalised industries have not spent as much as they originally said they would, the Government might imagine that they had imposed a cut in capital expenditure. I hazard the guess that in many cases they have done nothing of the sort. All that has happened is that the


nationalised industries have spent exactly what they would have spent in any case—in other words, their original calculation of expected expenditure was far too optimistic.
I say that with a certain amount of personal experience. If the Government adopt as part of their policy the idea that they can impose short-term adjustments on nationalised industries, they are inviting the heads of the nationalised industries deliberately to over-calculate the amount of money they will spend. Many of the heads of the nationalised industries are practical businessmen. They reckon that, if there is a possibility that the Government will cut their capital expenditure, they can put in a little extra at the beginning and, when the Government come to them, they can make a great show of cutting down their programme and satisfy the Government, when nothing at all has happened.
I very much doubt the statement of the right hon. Gentleman's predecessor, which was quoted this afternoon, that it was possible in twelve months to make a marginal reduction in capital expenditure of about £30 million or £50 million. I hope that the Government will look at the capital expenditure programme of nationalised industries from a longer term point of view and not again impose what they euphemistically call "short-term adjustments".
I am far from clear about how in practice capital investment programmes are dealt with by the Government. There are certain statements in the White Paper of the factors which the Government take into account in considering capital investment programmes. For example, paragraph 11 contains these very general terms:
The various programmes are considered in relation to the total outlay proposed and against the background of the economic situation. Levels of expenditure are approved for public investment as a whole and for each programme.
That is not a sufficient description of what happens in Government Departments when they are considering capital investment programmes. We are entitled to be told a little more detail about what happens and how Government Departments go about dealing with capital investment programmes.
To start with, I do not think that many Government Departments have staff technically qualified to deal with capital investment programmes. That point is brought out in the Report of the Select Committee on Nationalised Industries, British Railways. Paragraph 70 of the Report points out that the Ministry of Transport—a large and important Ministry—has not people technically qualified to deal with capital expenditure projects, to analyse them and to discuss them with technical expertise. Yet within recent months the Ministry has put control on every capital project of British Railways of a quarter of a million pounds and upwards. The Report admits that the Ministry is not technically qualified to do this job, yet within the last few months there has been an extension of interference by the Ministry in individual projects.
If the Ministry of Transport—this applies to other Ministries—is to adopt the attitude that it can deal in detail with capital expenditure programmes it should employ technically qualified staff—accountants, engineers, and so on—so that it can do the job properly, and not have to reach conclusions on information the bulk of which is supplied by the nationalised industry itself.
My guess is that when Government Departments deal with capital investment programmes they want to be tough. It is easy for a Government Department to be tough with the railways, which are admittedly in a bad financial position, of which there is much public criticism. My guess is that the electricity industry gets its capital expenditure programme through the Ministry of Power practically unscathed, because it is a successful industry. It expands its output year by year. If any industry can expand its output cumulatively 7 per cent. per year, many errors on capital investment and other things can be made and no one will find them out, certainly not by looking at the profit and loss account.
I do not suggest that that has happened in the electrical industry, but I do suggest that the criteria laid down by the Chancellor this afternoon for deciding whether capital investment programmes and capital individual projects should be agreed or not are not the same when one is dealing with an industry like the railways and one like electricity.


That is a very serious criticism, because it by no means follows that an industry in financial trouble is, by that fact alone, in less need of capital investment than one that is doing pretty well from a profit and loss point of view.
The right hon. Member for Blackpool, North (Sir T. Low), in what I thought was a very interesting speech—with which I agreed to a very large extent—said that the Government should be concerned with capital investment programmes only in so far as the Government were providing the finance for the programmes. That is an interesting idea, but, if I may say so, it seems completely impracticable, because what we have for these industries is a series of capital investment programmes that may in some cases be financed to the extent of 50 per cent.—the percentage varies—from their own internal resources, such as depreciation, reserves, accumulated profits and the like, and 50 per cent. from Government borrowing.
I am quite attracted to the idea that the Government should not think that they have an absolute right to go into every facet of the capital investment programmes of the nationalised industries, but it seems to me that, from the practical point of view, they probably have to do so. That makes it all the more important that we should get an answer to the criticisms I have made about the Government's competence to do that, and about the various practical criteria they adopt in dealing with those programmes.
The pricing policies of the nationalised industries is intimately bound up with the question of where those industries get the resources for their capital expenditure. The Chancellor said today, with reference to private enterprise, that high profits and rising profits were necessary for the financing of industrial expansion. I do not necessarily disagree with that. Obviously, it depends on what we mean by "high profits" and "rising profits." I think, however, that if that is an acceptable principle for private enterprise there is a fair argument for accepting the principle, at least to a limited extent, in public enterprise.
I am not at all sure, though, that the Government have really accepted that principle because, from what evidence we have had in the last few years, they would

appear to like to put the maximum pressure on the nationalised industries not to raise their prices, even where a rise in price is absolutely indispensable and where delay can only mean that the industries will accumulate losses. That applied to British Railways, and to the electricity, coal and gas industries, and there have been other examples.
If the Government are to tell us that high profits are necessary so that private enterprise can finance its own capital expenditure, it is hypocritical of them, in practice, to take the view that profits are in some way indecent in the nationalised industries. I am not in favour of nationalised industries milking the consumers—as some of them could well have done within the last few years—but I am in favour of striking a balance between the present situation where, by and large, the nationalised industries only attempt to make ends meet one year with another, and the existence in private industry of the idea that one should finance as much as possible of one's capital expenditure and expansion out of profits.
Some industries, like oil, have financed practically the whole of their tremendous expansion in post-war days out of accumulated profits. They have done it, of course, at the expense of the consumer. I do not suggest that we should apply the same sort of principle to the nationalised industries, but we should strike a balance, and the Government should give the lead.
The fact that, as far as I know, the Government have not said anything explicitly about this has not prevented them, in practice, from exerting pressure on nationalised industries to keep prices down, even where price increases were absolutely justified. It simply means that if these industries have to keep their prices down to the absolute minimum they cannot meet the ordinary economic circumstances that they are occasionally called upon to meet—a rise in wages or in the price of a raw material—without being put into financial difficulties, getting an almost impossible increase in efficiency, or, as a direct result, putting up their prices to such a small extent that in a year or less they are again faced with exactly the same position.
We all know that every time these industries put up their prices there is


a tremendous howl from hon. Members opposite, the Federation of British Industries and the rest, as though no private enterprise ever put up its prices. We had that with the increase in coal prices this year. There had not been an increase in coal prices since July, 1957; there had been three years of stability; there have been unprecedented difficulties in the industry, and the Coal Board has done a magnificent job in balancing the economic realities on the one hand and responsibility to the miners and the mining communities on the other. Nevertheless, we had that tremendous howl of protest then.
I should like to see the nationalised industries having a certain amount of money in hand, and they can have that only if they are allowed to charge prices that enable them to accumulate reserves and to pay for some of their capital expenditure out of those accumulated reserves and accumulated profits.
Those are important questions, but the White Paper does not answer them. It says nothing about the Government's attitude to the financing of capital expenditure in nationalised industries. It simply says what happens at present, but not what the Government intend should happen. Without a lead from the Government, the present position will continue indefinitely, and I very much hope that the questions that I and other hon. Members have asked will be given some sort of answer by the Government.
We know that the Government, taken as a whole—or at least their supporters on the back benches—do not like the nationalised industries, but those industries, as everyone now admits, have a very important part to play in our economy. They should get a chance to play that part as effectively as they can, and a great many of us at present feel that that is precisely what they do not get from the present Government.

8.28 p.m.

Mr. Nicholas Ridley: The hon. Member for Glasgow, Craigton (Mr. Millan) questioned very much the efficacy of altering public investment to suit any particular crisis in our financial day-to-day affairs. I agree that it does not seem likely that we can affect the situation anything like quickly enough, but surely, as it says in

the White Paper, the Government themselves have come to the conclusion that that is not an effective means of dealing with a temporary difficulty in the financial situation, and are rejecting it on that ground. It is a peculiar suggestion that to freeze the level of public expenditure for next year at the level at which it is running this year could in any way affect the extra demand on the economy this year.
The main theme which runs through this debate about which the hon. Member for Glasgow, Craigton made a comment is whether profitability should be the main consideration in investment in nationalised industry. I think we could compromise on the two views which have been expressed, by saying that profitability must be the main consideration but that where there is a social need for some form of activity, for instance to provide employment, then that should surely come under the same rules as are envisaged by the Local Employment Act.
For instance, if we wished to move an oil refinery to some part of the country where the oil company did not wish it, the Government should be obliged to find the difference between the economic cost and the actual cost, under the terms of the Local Employment Act. That, surely, could be applied in many cases to nationalised industries of all sorts.

Mr. Willey: This point has been made consistently throughout the debate, and I think hon. Members opposite recognise its implications. Agriculture gets a subvention from the Treasury of £250 million and more a year. It also receives direct capital grants. Is the hon. Gentleman arguing that those should be discontinued forthwith and that the test for agriculture ought to be ordinary profitability?

Mr. Ridley: We are surely debating a completely different subject from agriculture. The capital grant which the hon. Gentleman mentioned comes into the £250 million. I do not think that in any sense one could compare an industry such as agriculture with an industrial matter such as we are discussing in this debate. The two are not remotely comparable. If the hon. Gentleman wishes to remove the agricultural subsidy and apply tariff protection as well, I feel that we are getting far from the scope of this debate.
I wish to speak about the fuel policy. We have in this country four main fuels—coal, oil, nuclear energy and hydro or water power. Peat and wood play a very small part in our fuel economy—and when I say that, I am not, of course, referring to my right hon. Friend the Minister of Power.
I want to consider first hydroelectricity. We are investing £9·3 million in hydro-electricity this year and £13·4 million next year, and one wonders whether it is wise to go on increasing our investment in hydro-electricity. Taken on the ground of cost, the North of Scotland Hydro-Electricity Board sold electricity at 1·75d. per unit last year, and the South of Scotland Electricity Board with conventional thermal generation sold electricity at 1·52d. per unit, a reduction of more than ·2d. per unit.
Large areas of beautiful countryside are rapidly being altered, to say the least, by hydro-electricity, and though grouse, salmon and stag are not important economically, those who wish to destroy them are very important indeed to the economy in the North of Scotland. It is argued that hydro-electricity is producing a large amount of employment in Scotland, but I feel that we could equally well employ the Irishmen on building conventional or thermal stations of some sort in the North of Scotland instead.

Mr. Willis: Why Irishmen?

Mr. Spriggs: What has the hon. Gentleman got against Irishmen?

Mr. Ridley: I have nothing against Irishmen, but a large proportion of those employed on hydro-electricity stations are not, in fact, from the Highlands.
The policy of hydro-electricity was introduced at a time of national scarcity, and now that there is no scarcity it would be wiser to reduce our future investment in hydro-electricity in Scotland and perhaps build a nuclear power station in Scotland where all the conditions required for that form of power are ideal. Nuclear power cannot be regarded as the main source of energy for quite a long time ahead. It is not at the moment competitive with coal. It is estimated that it might be competitive with coal in ten years' time. Therefore what investment we make in nuclear power should be directed to trying to bring down costs

and to developing technically sufficiently to speed that process.
There is no point in building two nuclear power stations of exactly the same kind. It would be much better to build one every year or every six months embodying all the latest scientific and technical advances. I believe that the Government envisaged this in a recent White Paper, but I wonder whether we are not spending too much on nuclear power at the present stage when it is still very expensive.
I have had the good fortune to visit two nuclear power stations which are now building. I was very much impressed by the enormous safety precautions that are taken to ensure that there is no leak and no danger to people working there or to the surrounding countryside. This probably in itself is a sphere in which a reduction in costs can be made in future as we get more experience of the way in which these reactors behave and it is possible to simplify these matters.
Finally, there is the generation of electricity from coal. We are spending £148 million on conventional coal generation this year. I agree with the hon. Member for Newton (Mr. Lee) that we should pay tribute to the research and development which has brought the price of generation from coal down from about £75 to about £45 per kilowatt hour in the last ten years. This is an enormous technical revolution in spite of a 70 per cent. increase in costs during that same period. It is extraordinary that despite this wonderful development the cost of electricity has gone up by 25 per cent. over that same period. This is an example of the way in which enormous capital investment does not appear to be yielding the correct return in the form of lower prices.

Mr. Willis: What nonsense.

Mr. Ridley: We are bound to take account of these economic factors in considering the future of the coalmining industry. The hydro-electric contribution does not make all that difference either way. The nuclear contribution makes a small difference at present, but by 1970 and from then onwards it will make an increasingly greater inroad into the supply of power which at present


coal provides. It is estimated that conventional coal-burning stations will require more and more coal during the next ten years. That is quite probable and it is the only "plus" in the whole table.
The railways are spending £47 million this year alone on new diesel and electric locomotives and will take less and less coal—about five million tons less after five years. The gas industry will certainly not take more coal. It will probably take less. The industry has already found that it can buy methane abroad and bring it here and use it more cheaply than gas made from home-produced coal. The industry is also toying with the idea of making gas out of imported oil. I should like to know whether the Government will allow these developments, because they have a pretty big bearing on the future of the coal situation in this country.
The steel industry is a very big consumer of coal at present. The industry, freed from the shackles of nationalisation, is on the verge of some very important technical developments. The industry in making steel uses very nearly one ton of coal to 1 ton of iron ore. It is possible with the use of oil and electricity that the industry can cut out the whole of the part that coal plays in the manufacture of steel, and that means a 20 million tons a year reduction in the demand for coal by the industry.

Mr. Spriggs: The hon. Member has referred to the freeing of the steel industry from the shekels of nationalisation. I have heard money called many things, and I have heard this term used on one previous occasion, but if "shekels" means "money", the nationalised industries handed over millions of pounds when they were sold back to private enterprise.

Mr. Ridley: I said "shackles", not "shekels".
The only direction in the future in which the National Coal Board can look forward to increases in sales is the sale of solid smokeless fuel. At Stoke Orchard, in my constituency, there is a very interesting laboratory where the Board is trying to turn low-grade small coal into briquettes of smokeless fuel

which are convenient, can be prepackaged and will use up the coal which it is at present difficult to sell. This is very good, but I wish we could see faster progress. The pilot plant is not yet finished. There ought to be plants going up all over the country. I very much question whether there is sufficient investment in this branch of the coal industry.
There is a sharp divergence of opinion about what the future demand on the coal industry will be. It could be the 216 million tons envisaged by 1965 in the Revised Plan for Coal. However, I feel that that plan needs re-revising. However optimistic one may be, that target will not be reached. The Chairman-designate of the Board thinks it might be some 200 million tons in the next few years, and he feels that demand may stabilise at that. I believe he is being over-optimistic after his escape from the Opposition Front Bench.
The National Institute, the Economic Survey, probably my hon. Friend the Member for Kidderminster (Mr. Nabarro), and I all feel that the figure will be much lower than that. A figure which I have seen quoted is 170 million tons by 1965. We must take note of this very important divergence of opinion because the whole investment policy for fuel, and particularly electricity generation, must depend upon the view one takes on that.
Hon. Members opposite are always asking for a national fuel policy. We ought to have from the Government not a national fuel plan in the sense that one plans how much oil, coal and gas we should burn—that is impossible; if we did that, we should probably have to ask someone who had put in a coal grate to burn oil, or vice-versa—but a fairly clear indication of the terms of competition between the competing fuels. If the Government are prepared to let coal continue as at present in a very difficult competitive situation, I hope they will tell us so that we can make plans accordingly for the reduction in demand which I foresee.
I should like to return to my original suggestion that in order to make the competition fair where there has to be a social aspect to the activity the Government should at least provide some special payment to cover that. In the


debate on coal a year ago the Minister of Power said:
It is important that we should realise at the outset that, without the Coal Board's present stocking policy, a number of thousands of miners would have lost their jobs."—[OFFICIAL REPORT, 23rd November, 1959; Vol. 614, c. 52.]
That is true, but it amounts, as it were, to a service to help employment rather than to a commercial transaction on the part of the Board. In my view, the whole stocking operation should be taken out of the competition which the coal industry faces with the oil industry.
It may well be that another necessary step will be something on the lines of the Stedeford Committee to look into the competitive position, management structure and financial structure of the Coal Board. I do not know whether that is in the Government's mind or not, but I do not think that the industry should be ashamed to face up to such a close examination.
It may well be that a tax on fuel oil would help, but I do not think that this is a good solution, for I doubt if it would have the desired effect. It would put the balance of the oil companies right out, putting up the price of fuel oil to industry. The price of coal has already gone up and if we also raise the price of oil as well, all forms of fuel will merely become more expensive. That aspect, however, is not within the context of this debate.
We must recognise that coal is at present pricing itself out of the market. The increase this summer can only accentuate the decline in consumption. It is very difficult to see that we can arrest this decline, and it is pertinent, in the light of the White Paper, which proposes that this year once again we should invest £100 million in the coal industry, to ask whether this sum will go towards closing uneconomic pits in the tidiest way possible and affecting as few miners as can be; whether it will increase the efficiency of those pits which remain and so help to bring down the price of coal; and whether it will be too large an investment for a declining industry in view of the present fuel situation.

8.47 p.m.

Mr. E. Fernyhough: The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) comes from the North, but it is very obvious that he was

not speaking for anybody in Scotland when the spoke as a representative of a constituency in the South. He referred to salmon, grouse and deer. If huntin', shootin' and fishin' could save Scotland from economic disaster, it would have been saved a long time ago. But when it was found that they were not saving Scotland those who own the rights demanded from the nationalised industries which were developing hydroelectric schemes fabulous amounts of compensation.

Mr. Ridley: I said that these things were economically unimportant, but that what was important was the tourist trade, and that people were trying to face these things.

Mr. Fernyhough: It was considered by this House, and by almost all well-informed opinion outside, that the future of Scotland would be better served by paying more attention to hydro-electric schemes and a little less to the support of the pastime of the hon. Gentleman.
The hon. Gentleman evaded completely the question which my hon. Friend the Member for Sunderland, North (Mr. Willey) asked. My hon. Friend asked whether the hon. Gentleman would apply to the farming industry the same yardstick that he wants to apply to certain nationalised industries and to certain social policies which the Government follow. The truth is that if the same yardstick were applied to the farming industry as is applied to the mining industry 75 per cent. of British farms would be bankrupt within twelve months.
We have poured £2,000 million out since 1950 in subsidies to British agriculture. Hon. Members like the hon. Member for Kidderminster (Mr. Nabarro) complain that the £90 million lost on the railways and the £64 million lost on the Coal Board will have to be borne by the unfortunate British taxpayer, but it is the British taxpayer who has borne the £2,000 million which the farmers have had since 1950.

Mr. Ridley: The £2,000 million subsidy which the hon. Member has mentioned has gone entirely to the benefit of the consumer in the form of cheaper food. We have the cheapest food in the whole world, and that is a fact which should be borne in mind.

Mr. Fernyhough: That may be true, but when my hon. Friend the Member for Sunderland, North asked the hon. Member whether he would be prepared to sacrifice those subsidies he said that he would, provided that there was a protective tariff. In other words, the hon. Member claims that if agriculture does not get that subsidy it should be protected by other means. But the men in the mining industry are simply asking the Government to give to their needs and their future as much attention as they give to agriculture.
Both sides of the House are united about the importance of agriculture. We say that it is a basic industry and that, because of the danger of being too dependent on overseas resources, agriculture must be maintained, for it would be disastrous if we allowed the industry to run down, which is what would happen if we said that only those farms which were viable and economic could remain. Surely the same argument should apply to the pits for the same reason.
It would be disastrous for Britain's future to depend solely on imports of food and it would be similarly disastrous if we were ever so foolish as to make ourselves dependent for a substantial proportion of our fuel needs on outside sources. They might, in the event of war or international incident, be cut off just as our food supplies might be cut off. All that those in the mining industry and representing mining constituencies are asking for is that just as agriculture is regarded as basic and its future guaranteed so should the coal industry and the railways be regarded as basic and have their future guaranteed.
When I think of all the "lolly" which is poured out by the State to private industry, and the attacks upon and misrepresentations about the public sector of industry, I feel very bitter. Last Session, the cotton industry came along with a begging bowl and we granted it £30 million. I could not help thinking of working-class history. When the cotton industry was being developed, hand loom weavers knew that it was a challenge to their very living. These men, known as Luddites, went about Lancashire smashing the machines which they thought to be a menace to their existence.
How times change! We now pay the cotton employers £30 million a year to do precisely what we hanged the Luddites for trying to do. There is a remarkable transformation. I have seen photographs of machinery lying smashed in the mills, which is precisely what the Luddites tried to do, although they were rewarded in a vastly different manner. It is because the nationalised industries have to serve the public need to a much greater extent than private industry that I believe that the public must be told of the money being paid by the Government to private industry.
The hon. Gentleman referred to the steel industry. The Government are to sell back that portion of it which is still in public hands. Why? The answer is that it is profitable. The hon. Gentleman also referred to the mining industry, but they have no intention of taking that back, nor have they any intention of taking back the railway industry. It is remarkable, because one can see running through all their speeches the same pathological detestation of anything that smells of public ownership.

Mr. A. Woodburn: There is one national activity which the party opposite never objects to subsidising. It pours thousands of millions of pounds into the nationalised Army, Navy and Air Force. There has never been any objection to that.

Mr. Fernyhough: I concede that.
I have promised to sit down at the appropriate time, and I have only four minutes longer in which to speak. I wish to show that there is a complete harmony between the Front Bench and the back benchers below the Gangway on this side. That harmony is greater than hon. Gentlemen opposite think?
I am amazed at the audacity and short memories of hon. Gentlemen. We have heard one hon. Member after another decrying nationalisation and demanding that every penny invested in nationalisation should be checked, weighed and measured and accounted for from beginning to end.
In November, 1958, the unemployment figure in Great Britain reached half a million. The party opposite knew that an election was in the offing. It knew


that that number of unemployed was not a good wicket on which to try to win an election. What happened? Hon. Members should read the debate on the Address in 1958. In his speech the former Chancellor of the Exchequer said that the Government were concerned about the growing rate of unemployment, and that they had, therefore, decided to step up investment in the public sector immediately to the tune of £125 million to £150 million. The right hon. Gentleman said that that would provide 150,000 additional jobs, and that he hoped that the private sector would be stimulated to do likewise.
The party opposite could not have won the election if it had had to admit that the unemployment figure at the time had stood at 750,000. It was able to avoid doing that because we had provided the means. If we had not nationalised coal, gas, electricity, and steel, the party opposite would not have been able to solve the problem.
I ask hon. Gentlemen opposite to have the courage of their convictions. If they hate public ownership, if they are against all forms of nationalisation, instead of being satisfied with denationalising the profitable enterprises why do they not denationalise those which they know can never be made to pay here, and which will never be made to pay in any country because they are basic services which have to be provided whether they are profitable or not?

9.0 p.m

Mr. Frederick Willey: I am sure that the House is greatly obliged to my hon. Friend the Member for Jarrow (Mr. Fernyhough) for so vividly making plain and significant the point I put to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). More years ago than I care to remember I was taught by an imaginative geography teacher. I remember him on one occasion dramatically throwing a stone into a pond and saying: "My boy, that is the way you learn geography. Where the stone fell is your home, and you will expand your knowledge as the ripples on the pond reach its edge." That is what I intend to do tonight. I want to test the White Paper in the light of my experience.
We know that the Chancellor is new to his post, but I could not understand

his apparently taking the credit for full employment. Does he think that he is a Communist commissar? Is he responsible for full employment?

Mr. Selwyn Lloyd: I never suggested that I was responsible. I said that full employment was one of the satisfactory features of the present situation.

Mr. Willey: He conveyed it to the House as if it were a matter for which the Government could claim credit.

Mr. Lloyd: I did not do anything of the sort.

Mr. Willey: I am glad we have it clear that that is irrelevant. The Chancellor need not get so annoyed so early. I am only beginning with him. All the actions for which the Government take credit have diminished the chances of our retaining full employment.
I want to deal with the question of responsibility of the Government. It so happens that my constituency has not got full employment. We have an unemployment rate of between 5 per cent. and 6 per cent., and we have had this with us persistently. It is becoming aggravated, and the situation is deteriorating. Last Session we had the Local Employment Act. Can the Chancellor tell us what the Government have done for Sunderland? The steps taken by the Government have been completely ineffective and inadequate. Sunderland has no prospect of seeing any substantial improvement. The Government can point to no step that they have taken which can greatly encourage it, although this is a Government responsibility. Why have we had no answer to this sort of question?
We are fortunate that the National Coal Board, at any rate, has put a good deal of money, in capital development, into the Wearmouth Pit. I gather that that sort of development is being discouraged by the Government. Our major anxiety is shipbuilding, for which the Government have a measure of responsibility, first, because the Minister of Transport has accepted it, and, secondly, because every foreign ship-building industry with which we compete is backed to some degree by the nation which supports it.
Other countries are not very doctrinaire about this. Dr. Adenauer is not


worried by Clause 4. We know that the Howvaltswerke Hamburg and the Kieler Howvaltswerke, the big shipyards in Germany, are owned 100 per cent. by the West German Government. In this matter, which involves foreign competition, we must recognise our national responsibility. All that we can see in Sunderland is a steady deterioration of our position with the Government doing nothing at all.
I will give three guiding figures. We have tonnage under construction, at the lowest figure since June, 1946. The tonnage preparing—the really important figure for us—at about one-third of the figure of three years ago, and, as I have told the House time after time for the past couple of years or so, we are now a net importer of new shipping. This surely is an unsatisfactory position. This is why we are anxious in Sunderland. Here is a great national industry and we feel that we are being neglected by the Government who have declared their accountability.
Let us touch on two of the disturbing features directly affecting the Government. There is alleged to have been a report by the D.S.I.R. on the shipbuilding industry. We do not know what it is. We have had the Stedeford Committee reporting about the railways and we do not know what that is. I object to this. I do not like this Star Chamber approach. We ought to know what is going on. It is no use the right hon. and learned Gentleman laughing; the industry want it. I understand that there were discussions between the industry and the Ministry of Transport about the matter. I put down a Question to the Minister of Transport and what happened? It was transferred to the Minister of Education. According to the reply I had today the Minister of Education is having discussions about shipbuilding with the industry. We do not propose to put up with that sort of thing.
We are in a serious position and we do not intend to be pushed about in that way. All we have is a sub-committee of the advisory committee considering shipbuilding. Twelve months ago some of us were rather concerned about the transfer of functions from the Admiralty to the Ministry of Transport. We were not very impressed with the Minister—

a, foreboding which has now become more widespread. Then the Minister of Transport beat his breast and said:
If I find I cannot get on with the work, I shall go to the Prime Minister straight away and say that it is too much and that he should make some rearrangements."—[OFFICIAL REPORT, 25th November, 1959; Vol. 614, c. 509.]
The time has come when the right hon. Gentleman should go to the Prime Minister. If we judge this White Paper in the light of Government action we are certainly not very impressed in Sunderland or in the ship-building industry.
I discharge another responsibility. I speak occasionally from this Dispatch Box on agriculture. Each year the agricultural industry suffers enormous losses in livestock. I regard as a commentary to be read with the White Paper the Annual Report of the Advisory Council on Scientific Policy. The two documents should be read together. We are concerned with a scientific revolution. What do we find? We find that the Advisory Council is complaining at the lack of resources for the development of research into livestock diseases and meat. We cannot afford to go on in this way. The Low Temperature Research Establishment at Cambridge is under notice to quit, and, so far as I know, no arrangements have been made for new premises.
I come back to transport. I am reminded of Crowthorne. The Minister of Transport was blowing himself up about Crowthorne the other day. We are concerned about the delay in proceeding with this work. What we are particularly concerned about is that now that the roads are there, there are no buildings. It is this sort of slipshod approach, this inefficiency that reveals the hollowness of all that the Chancellor was saying. If I went ripple by ripple to the periphery I should find this at every stage. We know it.
I want to deal briefly with the reasons for this, but I call this in aid first of all. We have been hearing nothing about the Public Accounts Committee's Reports. This is a very sober all-party responsible Committee. I do not think that the Committee has ever produced such an appalling indictment as its reports on the control of public investment by Her Majesty's Government. I take this by way of illustration. We have heard recently much discussion


about guided missiles. Here is a paragraph of its Report on guided missiles:
The total direct cost, according to the latest estimate, will be respectively some thirty, ten and six times the original estimate.
Time after time in this Report we have references to the need for more realistic estimates, the need for machinery to check estimates and the need for current financial control. I should like the Chancellor to carry out an exercise and to come back to the House and tell us how many scores of millions of pounds have been wasted. It is not an exaggeration to say that, however one approaches this, one gets this picture of slipshod, inefficient, irresponsible handling of these enormous sums of money.
The reason for this, as my hon. Friend the Member for Newton (Mr. Lee) said in his admirable opening speech, is essentially political. What we cannot avoid if we look at the White Paper and if we consider, apart from the White Paper, the investment in defence and the public investment in private industry is the enormous part of the national economy for which we are now responsible. When Earl Baldwin said, "We are all Socialists now," it may have been controversial, but it cannot be controversial now.
This White Paper ought to have been discussed at the second conference held at Scarborough. These things were discussed at the first conference. We had a brilliant speech from my hon. Friend the Member for Southwark (Mr. Gunter). We appreciated this, and we are conscious of the problems that it brings to us. When a party spends its time denigrating the principle behind this, it is not surprising if we get it carried on in this way. Is it not ludicrous that we have this White Paper and that the word "planning" does not appear from the first word to the last in it? I ask the Chancellor to be encouraged by the Lady Chatterley result and to be a little more frank. I should not like to put so brutal a charge but, if there is no planning, it is time that we had a committee to inquire into the Government's conduct of public investment altogether.
Another important consequence arises out of this. Here we have an enormous field of national endeavour and we have this constant pettifogging denigration. That means that there is an

avoidance of national pride. That is what is lacking. This not only affects the public sector, but seeps into the economy generally. It is not surprising that this makes dull, or duller, enterprise in both the public or private sector. It is not possible to go about with the slogans, "You have never had things so good", "I am all right, Jack", "Life is better under the Conservatives" without getting some complacency. It would be far better if the Conservatives said, "Life will be better". It was the tense that was wrong.
Today we are living in a scientific revolution which we cannot stem. It has its own momentum. My right hon. Friend the Member for Huyton (Mr. H. Wilson) used very effectively to talk about the brake and the steering wheel. I mention something else, the accelerator. The job of the Government is to use the accelerator. As hon. Members on both sides of the House have said, the disturbing thing when one goes abroad to many comparable countries is that there one finds a sense of the need to accelerate, but that is missing here.
When we talk about league tables, it is rather like talking about our local football team. It is quite irrelevant to say, "They played rather better than they played last Saturday" when, in fact, they lost on both Saturdays. What we are concerned about is winning. I put this quite fairly to the Government. I have mentioned the White Paper and I have mentioned the Annual Report of the Advisory Council. It is a fact that there has been an increase in public and private investment. We can say that, but what we cannot say is that it is enough. We cannot look our competitors in the face and say that this is enough. This is the failure in the White Paper.
The purpose of this White Paper could only be to make us more complacent. I rid the Chancellor of that charge because he was frank enough to say that our place in the table is too low. My hon. Friend the Member for Newton (Mr. Lee) said that we were at the bottom, so this is just a matter of relativities. This is a matter which is becoming of increasing importance because, believe me, as competition intensifies this will be not only a matter of making relative progress—it might bring our progress to a stop.
My hon. Friend referred to Mr. Shonfield's article in the Observer. One of the distressing features brought out by that article was the disparity between investment in the public sector and in the private sector. I say to hon. Members opposite, "You do not improve this by attacking the investment in the public sector." That is not enough. We are trying to overtake the backlog of neglect. The investment in the public sector will show itself in the state of the national economy. We have not only to say that it is an ill-fortune for us if we have to hold investment in the public sector, but that we have to expand desperately urgently investment in the private sector.
This is the theme which runs through all the questions which have been raised in the debate, through the White Paper and, more markedly, because the Government are not responsible for it, through the Annual Report of the Advisory Council on Scientific Policy. However, wherever we make contact we have this picture of slipshod inefficiency and the second factor which I have now introduced—a lack of purpose and direction.
Coal has been mentioned. We have heard the speeches of my hon. Friends the Members for Chester-le-Street (Mr. Pentland) and Bedwellty (Mr. Finch) pleading for no more than this: the recognition of our national responsibility for this essential industry. But if we look at the Annual Report we find that they complain that we are not devoting sufficient resources to coal technology or to research and development on coal utilisation. What does the Advisory Council say generally but that we are not devoting sufficient resources to make the best use of our national resources? This is the essential basic problem, but if we have people denigrating all this, then it is difficult to devote the energies to these tasks which ought to be devoted to them.
We have had a discussion about the railways. Could anybody enlighten me what the position is about the railways? The Minister of Transport the other day referred to a committee, and he was irritated at Question Time today that reference was made to the fact that it was a committee, although he referred to it as a committee in the previous debate.

What is this committee doing? I am not sufficiently statistically minded to know how many committees there have been, but, as I understand him, this last committee will deal with the first and primary problem of the size and nature of the industry. It seems rather a waste of effort, does it not, to have conducted all the inquiries and then to say, having brought forward all the evidence before us, "We will now have an essential inquiry to determine the nature and character of the industry"?
This is amazing. I have complained of this too many times. Right hon. Gentlemen opposite are here to govern; they are Ministers, accountable to the House. We have far too much of this running away behind committees and then the reports of the committees being referred to another committee. In this case we do not even know what the report is. We have this in all sectors and running through all public investment.
Another illustration. We want a decision about civil aviation. We want to know when and at what rate we are going into supersonic flight in civil aviation, but it will be very difficult to obtain any decision from the Government. We had all the delay and procrastination about nuclear propulsion in shipping, and we are doing practically nothing about it. The West Germans have outstripped us here. We have not only to think about the United States and Russia but also about West Germany and Japan. Until the last few years—as long as we have been shipbuilders—we had always been the greatest shipbuilders in the world, but we are now a long way behind Japan and probably just behind West Germany.
Let us look at these league tables. In gross fixed capital formation over the last nine years West Germany and Japan have invested half as much again as we have. In rate of growth of output the West Germans and the Japanese have beaten us by three or four times, and in growth of output per worker their rate is over four times the rate at which we have increased.
These are the factors which are significant. This is the battle that we are fighting. It is no good, as competition sharpens every day, being complacent. It


is no good to denigrate an essential basic half of our national economy. Let us take pride in it and see that it gets the resources that are needed. In the private sector, I have no quarrel with private enterprise if it is enterprising, but let us demand that it is enterprising and that it is the purpose of the Government to make it enterprising. This is very difficult for everybody, not only in this House but on both sides of industry.
I am not saying this with any political motive. What disturbed me more than anything else at the last election—and I was disturbed enough already because I had to fight a tight marginal seat—was the possibility of another Conservative victory, because to me this seemed very like 1935. I hope I am not putting this in an offensive way, but any party that has been in office for a long time is enervated. This is one of the difficulties in a democracy. We have to have guts in a democracy, particularly when we are living in times such as the present.
The thing that disturbs me is the parallel between the last General Election and 1935. The cold war is continuing, the dangers are still there, and we must have a Government with the dynamic vitality to appeal to what is best in the nation. The nation is ready to respond if it understands, but if we have a political party which rests in power on the morality of "I'm all right, Jack" and "Life it better", not "Life will be better", it is very difficult for us to respond to the call that is absolutely essential if we are to see ourselves through the next decade.

9.28 p.m.

The Minister of Power (Mr. Richard Wood): I could not hear at the end whether the hon. Member for Sunderland, North (Mr. Willey) spoke about dynamic vitality or dynamic morality. Which was it? Morality, perhaps?

Mr. Willey: I am sorry to interrupt the right hon. Gentleman, but he has invited me to do so. Whatever I said, I should like to see a dynamic vitality, backed by morality.

Mr. Nabarro: Amorality or immorality?

Mr. Wood: I think we can all agree that that is a very remarkable admission.
At the beginning of the debate, the hon. Member for Newton (Mr. Lee) criticised the terms of the Government's Motion. I think he noted in it a certain absence of flamboyance which he might have expected, and I suggest that this is just another example of the Government's usual modesty and moderation. There has been a certain amount of contradiction on the benches opposite about the attitude my party is taking to the nationalised industries in this White Paper.
Most speakers opposite have talked about my party's opposition to nationalisation, but the hon. Member for Sunderland, North kept talking about the denigration of the nationalised industries. I certainly have not heard any denigration of the nationalised industries this afternoon, and, indeed, it is very difficult to tie this up with the criticism that we have received on other occasions that our support for the expanding capital investment programme for the nationalised industries is in some way illogical. We are determined to increase the efficiency of the industries in the public sector, and that is why we have brought forward this White Paper and the figures in it.
I could not understand the reference of the hon. Member for Newton to the subordination of public investment to private investment. At certain points his speech seemed to take on an atmosphere of complete unreality. He told us that he had undertaken various researches in White Papers and Blue Books. It seemed at one point that the only research he had undertaken was in the dictionary, trying to find as many naughty words as he could to use about my right hon. and learned Friend.
It is rather difficult to tie up what the hon. Gentleman said with the present state of affairs. Public investment is up by nearly £100 million compared with the previous year and taxation, which also affects consumption, is up. Surely the hon. Gentleman realises that one of the man objects of the Budget introduced by Lord Amory in April was to leave room for an upsurge of capital investment, both public and private.
My right hon. Friend the Member for Blackpool, North (Sir T. Low) talked about the upsurge of savings which has taken place. He also commented, quite


rightly, on the contributions that private industry has made towards public investment. I shall deal with one or two things he said about the borrowings of the nationalised industries when I come to one or two points raised by my hon. Friend the Member for Kidderminster (Mr. Nabarro).
I want to make quite clear why I am replying to the debate. It is centred on capital investment in the nationalised industries. The Ministry of Power is concerned with three of them, including the electricity industry, which has been discussed from time to time and has the biggest capital programme of them all. These three industries together account for two-thirds of the total spending of the nationalised industries.
As my right hon. and learned Friend said, the White Paper is a new departure. I hope that it is an improvement. In the last four years my Department has issued a White Paper on the three nationalised industries with which it is connected, namely, gas, electricity and coal. Therefore, this procedure is an extension of the practice which has taken place in the past.
Today we have had a number of general points, some relating rather more closely to an Amendment in the name of the Leader of the Opposition, which may be discussed tomorrow. I shall therefore leave the general points to my right hon. Friend the Chancellor of the Exchequer and to my hon. Friend the Economic Secretary. I shall also leave the points which relate specifically to the Ministry of Transport.
The hon. Member for Swindon (Mr. F. Noel-Baker) and my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies), whose speeches I was very sorry to miss, drew attention to certain aspects. They will be aware that a White Paper will be published before Christmas, and I hope that it will answer a number of points which they mentioned.
The hon. Member for Sunderland, North said that the unemployment situation in Sunderland was very difficult. He will remember that he and I were there together about a fortnight ago. I found that some of his constituents, who were very well informed on employment matters, took a very much more optimistic

view of the situation in Sunderland than he seemed to take this evening. I apologise to him for not being able to tell him how soon—I think the phrase was—we are to get into supersonic flight. I shall ask my right hon. Friend the Minister of Aviation if he can give the hon. Gentleman any information on that point.
Much attention has very naturally been directed today to the fuel and power industries, with their very important rôle in the expansion of our economy. The object of investment in them—and, indeed, of investment in all the nationalised industries—is to provide and maintain capacity to meet demand, and to meet it in the most economical way possible.
It will be quite clear that each nationalised industry in the fuel and power sphere has its own monopoly, but is in competition, and this has been emphasised once or twice in the debate, not only with the others but with oil. The total programmes of the nationalised fuel and power industries for next year show a slight increase over the probable out-turn for this year, largely because the increased requirements for electricity outweigh the reductions for coal and gas.
The hon. Member for Newton complained of the hand-to-mouth existence the nationalised industries had to live, but, as he knows, each fuel and power industry provides Parliament with a long-term programme covering five years or more. That procedure is generally approved, and, indeed, the future prospects for those industries are clearer for much longer periods than the hon. Gentleman seemed to suggest.
The electricity industry has been discussed. As my right hon. and learned Friend said, the demand is expanding, and the provision of capacity to meet that demand needs, as we see in the White Paper, a growing programme of capital development. My hon. Friend the Member for Kidderminster suggested that the capital necessary to finance the electricity industry would be reduced if that industry paid more attention to the important matter of increasing the load factor.
We are all aware that the load factor is most important, but I must tell my hon. Friend that I believe that the industry is doing its very best to increase


the load factor and, as he knows, it is increasing, but unless my hon. Friend can give me suggestions for changing the national habits and inducing a very much larger proportion of the British population to work at night, we really shall not be able to rival the level of the load factor in the United States. Further, my hon. Friend will probably agree that our summers, particularly this last one, are not, on the whole, very hot. Therefore, the possibility of very heavy loads for air conditioning such as obtain in the United States are rather more remote—

Mr. Nabarro: This is all a very technical and complicated matter, and this is not the appropriate time to go into it. I will give my right hon. Friend a complete dissertation on knocking the head off the peak load, which is the operative matter, at the right time.

Mr. Wood: I shall look forward to my hon. Friend's dissertation.
My hon. Friend the Member for Twickenham (Mr. Gresham Cooke) spoke of the desirability of greater self-financing of this and other industries, and I should like to deal with that point when I discuss the White Paper on borrowing which is to be published next spring. He also mentioned the possibility of differential tariffs in different parts of the country, but I think that he will agree that that should be left to the commercial judgment of the boards, and that it would be wrong of me to try to pronounce on it.
Gas is the second of the industries that are the concern of my Department. This industry is planning for a much slower rate of expansion; an average increase of about 6 per cent. in sales between 1959 and 1965. I was asked about the importation of liquid methane, in which I know that the House is interested. I have already undertaken to give to the House, if and when the time comes, the full facts, and to discuss with it any proposals made to me, but I should like to take the chance of stating that I have had no proposals made to me. If and when proposals to import liquid methane do come to me, I shall look at them and come to a conclusion in the light of all the factors of which the House is aware, and, of course, in the light of its effect on the coal industry.
I should like to deal with the coal industry which has been mentioned by a number of hon. Members. Over the last ten years the industry has undertaken a major programme of reorganisation and modernisation which has involved substantial and, up to now, regularly increasing annual investment. But the peak of the National Coal Board's capital investment programme has now been reached and a reduction in its annual investment budget is now beginning.
I should like to make clear to the hon. Member for Bedwellty (Mr. Finch), who raised this point, that there is no question of the National Coal Board being hampered in obtaining the capital it needs. No cut has been suggested by the Government in the White Paper. As the hon. Gentleman knows, it was always expected that in the 1960s this peak would be reached and that annual capital investment would begin to decline.
The hon. Gentleman asked me, in his speech which was directed almost entirely to the welfare of the coal industry, to try to give confidence to the coal industry. I must suggest to him and to one or two of his hon. Friends that what they suggested can hardly be calculated to give to the industry the confidence which he and they would like it to have. He talked about production, demand and manpower all declining over the last three years. Indeed, he is perefectly right that in 1959 the demand for coal had fallen to 195 million tons, but I must point out that the demand for coal this year is likely to be something over 200 million tons.
Although manpower is certainly causing anxiety to me and to the National Coal Board—I think the hon. Gentleman may know the figures—recruitment shows a considerable improvement; but it will not continue to do so if hon. Members—and here my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) seemed to fall into this mistake, too—are determined to describe the prospects for the industry in terms which the facts at present, with increased demand this year, do nothing to justify.
The hon. Gentleman complained of the competition that the coal industry was facing from oil and he asked for a co-ordinated fuel policy, which I think I now


understand means that the coal industry should have some protection from oil. He complained of our dependence on imported oil. The difficulty, as I think ha will recognise, is that coal does not run either motor cars or aeroplanes and it does not run tractors or combines. All our transport, as I think he will agree, and most of our agricultural production depend on oil products. Therefore, oil is absolutely essential to our economy, and home refining of oil has been encouraged by all the post-war Governments, both Conservative and Labour.
I think the whole House will agree that it would be wasteful to make less than the fullest use of all the products which the refineries produce.

Mr. Lee: indicated assent.

Mr. Wood: I am glad to find that I am carrying the hon. Member with me, because he complained of the imports of fuel oil into this country. In fact, as he knows, we send out of this country more fuel oil than we bring in it. In other words, if there were neither imports nor exports of fuel oil the competition which oil would offer to coal would be even stronger than it is at present.

Mr. Finch: Is the right hon. Gentleman including bunkering?

Mr. Wood: I am indeed, but bunkers go out of the country.
The hon. Member for Newton referred to the effect of these oil imports on our balance of payments. I can only assure him that when all the aspects of Britain's international oil trade are taken into account, including carriage and the production of oil equipment, the industry makes a considerable and positive contribution to our balance of payments for which my right hon. Friend the Chancellor of the Exchequer is grateful.

Mr. Lee: Would the right hon. Gentleman take up the point that I made and let us have a really comprehensive analysis of the oil import returns and their effect on the balance of payments position? It would be a great help to us.

Mr. Wood: I shall certainly do my best to provide the hon. Member with the figures to show him the truth of what

I have said. I am convinced that it is the truth.
The hon. Member for Bedwellty mentioned the need to modify further the oil-fired electricity generation programme. I ask him to accept that the original programme as suggested some years ago has been very substantially modified. It is quite impossible to talk of cancellations of contracts, but the contracts have been modified to allow a greater burn of coal and a smaller oil burn than was originally planned.
I should like to come now to an important matter which has been mentioned by a number of hon. Members. The hon. Member for Bedwellty quoted from the Select Committee's Report to suggest—and I paraphrase—that the Government when they take decisions to persuade nationalised industries to act uncommercially against their will should accept responsibility for those decisions. The hon. Member took the example of an apparent loss, according to his figures, of £2,000 million of revenue which the Coal Board could have collected if the Government had nodded their head when the Board suggested a price increase some years ago.
I ask the hon. Member whether he thinks that it could possibly be justified for the Coal Board to have used its monopoly power to the extent of extracting £2,000 million of extra revenue. If it had, what would have been the effect on the goodwill of the industry and what would have been the effect on its trading position at the present time? The effect on the demand for coal and the deterioration of the Board's trading position if it had exercised its monopoly power in this way would have been disastrous.
The hon. Member then mentioned that the Board had to bear the loss of imports of coal, but he took no account of the earnings which the Board at the same time and later made on the export of coal at higher prices to the Continent and elsewhere.

Mr. Thomas Fraser: How is the balance?

Mr. Wood: The balance is that the gains on exports were rather greater than the £78 million which the hon. Member for Bedwellty alleged were lost by imports. The hon. Member also mentioned responsibility for mining subsidence. I


do not understand why the Coal Board should not accept that obligation.

Mr. Fernyhough: Why did not the private owners accept it?

Mr. Wood: That has been the acceptance of new obligations which I think any modern industry should accept, and indeed the acceptance of these obligations was agreed in the House without any Division.
Lastly it has been suggested by hon. Members, including, I think, my hon. Friend for Cirencester and Tewkesbury, that the decision to stock coal and thus prevent considerable unemployment should be made the responsibility of the Government, but this decision was a decision taken by the National Coal Board and a decision which I readily admit the Government at that time thought quite right. The National Coal Board has a responsibility for the welfare of those whom it employs, and I think that it would have been quite impossible for it commercially to take a decision to close pits rather than stock coal and thus incur widespread ill-will.

Mr. Loughlin: Would private enterprise have done that?

Mr. Wood: I am talking about the obligation placed upon the Board by the Coal Industry Act which was passed by the party opposite. That is why I think the National Coal Board was right to take that decision in order to safeguard the welfare of those it employs. It was taking a decision which fell within its own responsibility.
My right hon. Friend mentioned the limited extent to which programmes of the kind we are discussing can be deliberately increased or reduced in the short term in order to influence the general economy and employment policy. This matter has had a certain amount of attention in the Press, and it has also been referred to once or twice today. I should like to give an example in practice of the limitation of this economic weapon, as it was once regarded at the end of the war. In the Employment White Paper. In August, 1957, the Government decided to reduce public investment, but investment continued to rise till the end of the year, and there were no effective reductions until the middle of 1958. On the other

hand, in the autumn of 1958 and early in 1959 decisions were taken which have been referred to today. This will perhaps be relevant to some remarks by the hon. Member for Jarrow (Mr. Fernyhough). These decisions produced no significant increase in public investment as a whole until the third quarter of 1959.
Therefore, it seems to me to be quite clear that much public investment consists of large projects which take several years to carry out and, in addition, a considerable time to plan before the work starts. There are, indeed, some short-term projects where the planning and construction period is shorter, and there is some possibility of deferment there. Unfortunately, merely because a project is a short-term one does not necessarily mean that it is any less urgent or important than a longer-term one, and changes in the short-term programme are not necessarily effective for that purpose because they are often masked by other changes in the tempo of longer-term projects which, once undertaken, cannot easily be stopped or deferred.
I promised at the beginning of my speech to return to the speech of my hon. Friend the Member for Kidderminster, particularly his suggestion that there should be, instead of the procedure which the Government at present adopt, a procedure involving an eight-Clause nationalised industries Bill. I would not attempt to enumerate the Clauses, but my hon. Friend outlined them to us.
I think that what my hon. Friend would like to see is an Estimates procedure for the nationalised industries. I suggest to my hon. Friend that an Estimates procedure may be perfectly suitable for a Government Department but it is wholly unsuitable for a commercial undertaking. What I think we are trying to establish in our continual attempts in feeling our way is the best possible balance between, on the one side, commercial freedom and, on the other, Parliamentary control. I am convinced that the balance is about right, because, with our borrowing power legislation, our procedure allows us to look at each industry about every two or three years.
I think it is worth mentioning in this connection that the Postmaster-General's


White Paper moves away from the Estimates procedure towards a greater degree of commercial freedom than existed previously. That is why I think we should be wrong if we accepted my hon. Friend's suggestion to move away from commercial freedom in the case of the nationalised industries towards an Estimates procedure to try to deal with their needs.
My hon. Friend asked me questions about the money provided from internal resources. This is dealt with in paragraph 8 of the White Paper, the last sentence but one of which says:
The amount of money to be lent by the Exchequer to the nationalised industries will not be settled until the amounts available from their internal resources can be more precisely estimated and taken into account.
Then it promises a White Paper in the spring to deal with it. Therefore, my short answer to my hon. Friend is that I am afraid I cannot give him the answer about the amount of borrowing yet because, for the reasons stated in the White Paper, it is a little too early for me to do the sum.

Mr. Nabarro: rose—

Mr. Wood: I must finish. I will have a talk with my hon. Friend later.

Mr. Nabarro: I will write to my right hon. Friend.

Mr. Wood: My hon. Friend asked me about losses to September, 1960. As the figures are not published until later, I must disappoint him. I cannot make them public until they are published.
He also asked whether there would be a Statutory Instrument before Christmas to increase the annual borrowing power of the National Coal Board. He mentioned the limit of £75 million in any one year. He was forgetting the successful Amendment which he moved which reduced the limit to £50 million, but I must tell him that even his Amendment does not look as though it is going to succeed in achieving a debate, because borrowing for this year looks like being under £50 million.

Mr. Nabarro: Jolly good. I have succeeded.

Mr. Wood: It is unlikely that an Order will have to be introduced before Christmas.

This is due to lower capital investment and to greater stock lifting than was expected.
My last point concerns what control over a nationalised industry the Government should exercise. I will try to make clear the way the Government see the different responsibility of the industry itself, the responsibility of the Minister, and the responsibility of the Government as a whole. Clearly, the prime responsibility must rest with the nationalised industry itself. It has its obligations to make ends meet, taking one year with another, and its investment programme must enable it to fulfil those obligations.
The responsible Minister, on the other hand, has certain powers and duties. He approves the size and shape of the investment programme, promotes legislation from time to time in order to regulate the industry's borrowing limits, and, under present arrangements, authorises the issue of funds from the Government which it may need to operate. Therefore, he exercises a general oversight over the industry's affairs, must satisfy himself about the shape and size of the investment programme and its relation to other programmes under his control, and must closely acquaint himself with the major elements in it.
The Government as a whole are responsible for determining the total amount of public investment and the priorities among the different programmes when the total exceeds the available resources. There may be from time to time necessary variations in these arrangements, but broadly speaking they represent the Government's thought on the best method, between the industry concerned, the Minister responsible, and the Government as a whole, of trying to answer what are admittedly, and have been admitted on all sides today, to be very difficult problems indeed.
I hope that I have been able to answer some of the points raised in this debate, and I apologise for not answering them all. They were on a very wide variety of subjects, and no doubt my right hon. Friend, when, if the House gives permission, he winds up the debate tomorrow, will answer any points I have neglected. I hope that I have made clear the way in which the Government view the present difficult problem of financing


the nationalised industries and—to my hon. Friend the Member for Kidderminster—any particular difficulties which I see in altering the procedure. I hope that he will accept the reasons I have given.

Debate adjourned.—[Mr. Chichester-Clark.]

Debate to be resumed Tomorrow.

BUSINESS OF THE HOUSE

Proceedings on the Expiring Laws Continuance Bill exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Redmayne.]

EXPIRING LAWS CONTINUANCE BILL

Read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Chichester-Clark.]

Committee Tomorrow.

EXPIRING LAWS CONTINUANCE [MONEY]

[Queen's Recommendation signified.]

Considered in Committee under Standing Order No. 84 (Money Committees).

[Sir GORDON TOUCHE in the Chair]

Resolved,
That, for the purposes of any Act of the present Session to continue certain expiring laws, it is expedient to authorise the payment out of moneys provided by Parliament of such expenses as may be occasioned by the continuance, until the thirty-first day of March, nineteen hundred and sixty-two, of the Rent of Furnished Houses Control (Scotland) Act, 1943, the Furnished Houses (Rent Control) Act, 1946, and Part II of the Licensing Act, 1953, being expenses which under any Act are to be provided out of such moneys.—[Mr. Barber.]

Resolution to be reported.

Report to be received Tomorrow.

TAXI SERVICE, LONDON

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]

10.2 p.m.

Mr. Rupert Speir: I welcome this opportunity of drawing attention to London's taxi-cab service. I think that as I make my remarks it will be made clear that I am critical of the service, but not of the taxi-men who operate it. By and large, they are good public servants. They have an excellent accident record and an even better one in the matter of prosecutions. They operate under extremely difficult conditions and the last thing that I want to do is to make their jobs and their lives more difficult than they now are.
Nevertheless, I do not regard London's taxi-cab service as being in any way adequate to deal with present-day requirements, and unless action is taken fairly soon the service will deteriorate still further. It is extraordinary that although the taxi-using public is a great deal larger than it was in pre-war days—many more tourists visit London and, as a result of the higher standard of living, many more people are now able to make use of taxis—there are 2,000 fewer taxis operating in London than there were pre-war. The number has gone down even in the last ten years. Whereas, in 1950, there were about 6,800 taxis operating in London, the number has now dwindled to 6,000.
I realise that the service is somewhat more balanced than it was before the war and that there are now more taxi drivers per cab than in those days. Nevertheless, the fall in the number of cabs available for hire is one of the main reasons why the service is inadequate. If I ask someone whether he agrees with me that there are not enough taxis, I am at first regarded with horror. I am thought to be mad, but when I explain that I am referring to taxis and not taxes, people readily agree with me. There are not enough taxis, not only in the peak evening rush hours between five and six, but during other hours of the day and night and, of course, there is a great shortage whenever it is raining.
I find from my researches that as long ago as 1953 the Runciman Committee,


which was set up to examine the whole operation of taxi-cab services, said, in paragraph 38 of its Report:
The evidence submitted to us indicates that under present economic conditions the decline in the number of cabs plying for hire will continue until there ceases to be an effective taxi-cab service in London.
The Report continued:
This poses the question, whether such a state of affairs would be against the public interest?
The Report pointed out that London is a capital city, unique both in size and character; that it is the centre of Government of the United Kingdom and the hub of the British Commonwealth and Empire; that it receives a constant stream of visitors from all over the world, and that most of the visitors are dependent on the London cab service.
The Report concluded:
… in our view it is beyond question that London needs a service with the flexibility and convenience which cabs alone can provide, a service capable of meeting the demands upon it (frequently of an emergency character), at all hours of the day and night.
I think that hon. Members and others will agree that anyone who examines the problem in London today must come to the same conclusion reached by the Runciman Committee. I cannot agree that London is today getting the service which this great capital city deserves. I feel that the Home Office, Scotland Yard, the cab owners, the drivers, and all concerned should now examine this problem anew.
Many of the carriage and licensing rules and regulations are steeped in antiquity, and I think that every one of the rules and regulations governing the licensing and the control of taxis in London—many of which were drawn up in the days of the horsedrawn carriage—should be re-examined and looked at anew. I find it a suspicious and extraordinary fact that so many of the drivers have to go back to the garages to change over their cabs at the peak hour of between five and six o'clock. That is the hour when they are most required.
It has been suggested that this habit derives from the time when the cabs were horsedrawn and the horses had to be watered at regular hours. I imagine that the trade will deny that this is the cause of this extraordinary hour for changing over the driver of the cabs,

but, whatever the origin or the reason may be for this system, I think that it could and should be changed now. At any rate, let the rules be examined to see whether it is essential that drivers going back towards their garages should not pick and choose their fares. Surely if they are going in the direction of a garage and can pick up a fare who wants to go in that direction they ought to be allowed to do so. However, I understand that the present regulations forbid that practice.
I understand, too, that at present, because of the regulations, difficulties are put in the way of drivers accepting fares in advance at a fixed hour. I think that it would greatly ease the situation if advanced bookings of taxis could be arranged. I think that most people would consider it well worth while to be relieved of their anxiety and know that they can get a taxi for certain at a fixed hour. I am sure that they would be prepared to pay a substantial extra surcharge if that practice could be introduced.
The system ought to be examined to encourage, and not to prevent, as I understand it does at present, the possibility of fixed bookings being made in advance. That system ought to be encouraged. In this electronics age, surely something more could be done by setting up a central organisation or agency to enable cab drivers to be at the right place at the right time. The problem could be greatly eased if that could be arranged. A demand very often builds up in one part of London, and if only we could arrange for cab drivers to be directed to that area we would be helping to solve the problem.
I know that it is always considered absurd for a Tory to suggest any form of regimentation, control or direction, but the London taxi service is far too uncoordinated. There is too much "red tape" and not enough sensible co-ordination. In fact, there seems to be a general free-for-all, with the result that the travelling public is all too often forgotten and left stranded.
The Post Office could be of considerable assistance if it were prepared to bestir itself. It could be of some help—and it would be a splendid advertisement for the Post Office—if it could arrange that anyone who wanted a taxi


could dial either TAX or CAB and be immediately connected to the nearest cab rank. If that cab rank number happened to be engaged by a previous caller the call could be transferred to a centralised agency or to the nearest available cab rank. It is not asking too much to provide a system of that kind in the second half of the twentieth century. If this is too fanciful a suggestion to put forward, at least the Post Office should arrange for more telephones to be provided at the busier ranks. At present, if a person rings up a rank such as Sloane Square at a busy hour he usually finds that the telephone is engaged.
I hope that I have said enough to show that the Home Office should reexamine the question of the London taxi service. I hope that it will be given a good spring clean. The Home Office has kept a very tight control over the service and it should not try to evade its responsibility.
One last suggestion, which may not be welcomed by the taxi trade—which is not altogether receptive of new ideas—is that novel methods should be employed to enable the travelling public to get from A to B without having to use private transport. The time has come when we should consider introducing smaller cabs, as is done in many foreign countries. At present, the new taxis that are coming on to the streets of London are unnecessarily large, owing to the regulations, and are expensive both to buy and to maintain.
If one looks at the taxis in service on usually find that they are occupied by only one person. Now that we have mini-cars the time has come for us to have mini-cabs or even, as in Hong Kong or Tokyo, motorised rickshaws. Let us have them, and at a still cheaper rate. They would be specially helpful in rush hours. It would require Home Office sanction, and if the taxi trade is not prepared to introduce them London Transport Executive might be asked to do so.
These are just a few ways in which I believe that the London taxi service may be modernised. Above all, we want the wind of change to blow through Scotland Yard's Public Carriage Office and the appropriate section of the Home Office. These were the concluding words

of the Working Party on Hackney Carriage Law in its Report in 1951:
The investigation carried out by the Working Party indicates that a revision of the hackney carriage law … is overdue, and it is to be hoped that the time and opportunity may be found to introduce new legislation which will accord more with the present-day type of 'hackney carriage' and its use than does the existing law, much of which goes back to the first half of the nineteenth century.
That was the concluding observation of the Working Party set up by the Government and those are my concluding words.

10.16 p.m.

Mr. Francis Noel-Baker: I hope the hon. Member for Hexham (Mr. Spier) will allow me to "poach" for a minute or two upon his Adjournment debate time to support and amplify his argument. The hon. Gentleman confined his remarks to London. He has not made a constituency speech. I wish that I could have had the opportunity to say a word about the taxis in Swindon and the trouble that they are having with "pirates", but that would be out of order. However, I hope that I shall have an opportunity to do so on some other occasion.
I agree with the hon. Member that it is a matter of urgent public necessity that that part of the transport system provided by taxis should be increased. I should like to see many more and cheaper taxis. One is beginning to believe that for a resident in London or for people who work in London, it is almost becoming anti-social to own a motor car. The inadequacy of other public transport services makes it difficult to know how to move from point A to point B.
On occasions when I have to catch a train to my constituency in the mornings, and it is raining, I find it difficult to get a cab. I hope that the Home Office will examine this matter again. I suggest that there should be an improvement in the telephone facilities. It was once possible to ring a number, Terminus 8800, and one could get a cab. But that number seems to have gone off the air and it is now difficult to find a telephone number from which one can obtain a reply during the peak hours.
I hope that the Home Office will not overlook the conditions of the cab


drivers. I think that I am right in saying that they are among the few surviving public servants with no regular wage, no salary, and no superannuation scheme. They depend entirely on a share of the money on the clock. I am sure that the time will come when their position ought to be looked at again and their conditions of employment regularised. I add my plea to that of the hon. Member for Hexham, and everybody living and working in London will be grateful if we can get a cheaper taxi service.

10.18 p.m.

Mr. R. Gresham Cooke: I wish to support what my hon. Friend the Member for Hexham (Mr. Speir) has said about the physical features of the taxicab. For fifty years the vehicle has been practically unchanged. It is almost Victorian and suitable only for carrying a family with a large amount of luggage. When I was recently in Tokyo I saw three types of taxicab, the 80-yen cab, the 70-yen cab, and the 60-yen cab. They were the five-seater, the two-seater, based on the little Renault chassis, and the one-seater, based on the little scooter which was referred to by my hon. Friend.
For a businessman who wishes perhaps to travel about half a mile the one-seater is suitable. In the congested areas of London—and in Tokyo it is just as congested—it would be possible to use many more taxis if they were of a design other than the present Victorian type taxi. I should like my right hon. Friend to look at this problem of the vehicles as well as of the service.

10.19 p.m.

The Minister of State, Home Department (Mr. Dennis Vosper): As one who, during last Session, frequently arrived at Euston Station about midnight on Sundays, I share the view of my hon. Friend the Member for Hexham (Mr. Speir) about the difficulty of getting a taxi in London on some occasions. At the same time, I join in the tribute he paid to the service. London taxi drivers are thought by many to be among the finest in the world.
The Home Secretary has a responsibility here, but only in the Metropolitan Police District and the City of London. He exercises that power under the Metropolitan

Public Carriage Act, 1869. His power relates to the fixing of fares and the providing of licensing arrangements for the cabs and for the drivers. In fact, as I think my hon. Friend knows, these powers are exercised on his behalf by the Deputy-Commissioner of Police for the Metropolis. The point that I want to make quite clear is that these powers are concerned with the setting of approved standards of safety, skill and knowledge in the interest of the public and are not concerned with any attempt to control the market as between the public and the trade.
Licences to drivers are issued by the police, provided that the applicant is of good character and fit to act as a cab driver and passes the fairly stringent test of knowledge about London streets. It is sometimes said that this test is too severe. I should have thought that a very high knowledge by London taxi drivers in the congested streets of our City today is essential, and that the high success rate of drivers in passing this test obviates the need for lowering the standard.
With regard to the standards of the taxicabs themselves—a point raised by my hon. Friend the Member for Twickenham (Mr. Gresham Cooke)—it is true that they must be constructed in accordance with specified conditions of fitness, most of which are designed to secure the safety, comfort and convenience of the passengers. One condition, namely, that the cabs must have a 25 ft. turning circle is concerned essentially with the traffic conditions. Each taxi, as I think hon. Members know, is carefully examined and tested at least once a year and is subject to other inspections during the year. All this, the licensing of the drivers and of the cabs, is done to ensure the highest possible standard of safety and freedom from breakdowns and this attitude must have some bearing on the points put by my hon. Friend the Member for Hexham.
There is, however, no control that my right hon. Friend exercises over the number of cabs or drivers, and any company or individual, if he and his vehicles have the necessary qualifications, can enter the trade. My hon. Friend was possibly a little too gloomy about the number of cabs in the trade. They have, it is true, fluctuated over the last twenty


years. They dropped from the figure he mentioned of just under 7,000 in 1950 to 5,443 in 1953, just after the Runciman Committee's Report. But they rose again to 6,247 at the end of October this year, so since 1952–53 there has been an increase, although the figures are not back to the pre-war standard. At the end of October, last month, there were no fewer than 9,877 drivers. It follows that there are always more drivers than taxicabs, as some taxicabs have two drivers owing to the shift system.
Therefore, the trend over the last six or seven years has been in the right direction. Compared with 1953, the number of cabs has increased by 14 per cent. and drivers by 9 per cent.
My hon. Friend is, I think, aware of the approach made to the Home Secretary and to all Members of Parliament earlier this year by the Joint Committee of the London Cab Trade. This called for Government intervention in the form of a scheme for stabilising the trade and limiting the entry. It was the old argument put to the Runciman Committee and decisively rejected by it seven years ago.
In recent weeks, my right hon. Friend has considered once again these arguments as a result of a deputation received at the Home Office, but he is writing to the trade to inform them that he sees no reason to impose any limitation on right of entry into the trade. He does not consider that such action would be in the interests of the public, nor does he accept the argument that the demand for taxicabs has reached its peak or that earnings and conditions of the taxicab proprietors and drivers are in jeopardy.
I know that my hon. Friend the Member for Hexham will welcome this decision, but I think that he wants to go in the other direction on the grounds that even now the supply is inadequate or insufficient to meet the demand. I think that he realises that there is no way in which the Home Secretary can actively promote an increase in the number of taxicabs, and I am sure that he would agree that this should be decided by the law of supply and demand.

Mr. Speir: Not altogether.

Mr. Vosper: I think that probably this will meet his point. He probably argues, or I understand him to argue,

that the restrictions at the moment imposed by the Deputy Commissioner are such as to prevent the natural expansion which he thinks would otherwise take place. In this respect, for example, he advocates the introduction of minicabs, which would not be possible under the present regulations.
If I may deal with the last point first, because probably it is the most important and is the most novel, the arguments against a vehicle like a minicab seem to be three in number. First, and most important, it may not be of sufficient strength to stand up to the strain of cab work in London. A taxi averages 40,000 miles a year and one which was tested recently averaged over 60,000 miles. Therefore, it has to be a strong vehicle. Secondly, this experiment has been tried. Two small vehicles were tried in London in 1928, but there was little demand and they were withdrawn. The third argument against is that it would be unlikely that manufacturers would think that the limited market in London would justify the production of a specialised vehicle such as my hon. Friend has in mind.
Those are the arguments against, but I can tell my hon. Friend that the Deputy Commissioner would be willing to consider some relaxation of these conditions of fitness subject to safety standards being maintained so as to allow a smaller model such as he has in mind, although not of the particular pattern he suggested, to be introduced. I think that my hon. Friend will accept that it must be for the manufacturers and the trade to get together if they feel there is sufficient public demand and support for my hon. Friend's suggestion. I do not think that it would be possible for the Deputy-Commissioner himself to initiate this matter, but if an approach is made to him for a smaller taxi he would be willing to consider whether some relaxation could be made.
My hon. Friend raised the question of telephones. This is largely a matter for my right hon. Friend the Postmaster-General, and I will bring this debate to his attention. I think he would tell my hon. Friend that he already provides 100 telephones free of all rental for the taxi service and he would be willing to provide further telephones only if the taxi trade itself is willing to pay the normal rental but I shall see that this matter is brought to his attention.
My hon. Friend also proposed the setting up of a central exchange which intending hirers might ring up and which, in turn, would direct a suitable vehicle to a pick-up point. Again, I think, it must be for the trade to bring about a scheme of this kind since it would have to bear the cost of renting the necessary equipment and to provide the staff to man it. I am sure that my right hon. Friend the Postmaster-General would be willing to co-operate if the trade were to present suitable proposals that met these requirements.
My hon. Friend suggested than it should be possible to book a cab in advance on payment of a surcharge on the normal fare. I am rather doubtful about this suggestion. I am not entirely satisfied that the point is not already covered in the existing regulations. My experience is that cab drivers are usually anxious to accept this type of booking, but they are content to charge the meter fare from the pick-up point and hope for a rather substantial tip in addition. I cannot help feeling that that might be the correct solution to this problem.
I have much sympathy for my hon. Friend in his remarks about the six o'clock period in the evening when the changeover takes place. I think that there is something in the point he made about the two shifts per cab. I express the hope that his words will come to the notice of the trade, because I think that it is losing good customers in that peak period of demand.
I am not quite so certain that I share his view about the right of a driver to reject or choose a fare on his homeward journey. This would strike at the

foundation of the present system which rests on the availability of a cab that is plying for hire to anyone who wishes to hire it for a journey within the prescribed limits of six miles and which does not exceed one hour's driving time. This is a valuable safeguard to the public and I should not like to see it breached even at one point.
Finally, my hon. Friend suggested that the regulations are obscure. As one who has to study these regulations I have some sympathy with him, but I must tell him that the working party which was set up to consider this in 1949 failed to reach agreement on several important questions of policy. Without giving rise to too much hope, I will consider whether anything further can be done.
I have ventured some early reactions to my hon. Friend's suggestions many of which I am sure he realises are for the trade to consider and not the basis for Government intervention. In general, I believe that there is a case for the expansion rather than for limitation of the London taxi service and, as I have said, the Deputy Commissioner is prepared to consider whether there are any relaxations of conditions which can be made to this end consistently with the need to preserve the proper safeguards for the travelling public.
I hope that my hon. Friend's words will not only come to my attention, but to the attention of the trade. He has done a valuable service in airing this matter tonight.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to eleven o'clock.